Judge Trotter Got a Challenge He Couldn’t Refuse
Justice John K. Trotter Jr. is one of the state’s ranking jurists, and was quite content with his $93,272-a-year job.
But the chance to own a piece of a company that intends to become a statewide private judicial system--to take the controversial private judging concept to new heights--proved too enticing.
Trotter, who confirmed at a press conference Monday that he is retiring Aug. 31 as presiding justice of the state Court of Appeal in Santa Ana, said he will begin a new career as a businessman and private judge Sept. 1.
He will join H. Warren Knight, a longtime friend and former Orange County Superior Court judge, in Knight’s newly reorganized Judicial Arbitration & Mediation Service Inc., based in Santa Ana.
As part of the reorganization, the company is opening branches in Los Angeles and San Diego this month. It expects to add up to 13 retired Superior Court and appellate court judges in the next few weeks to the 16 former jurists who now contract their services through the company.
Judicial Arbitration, which handled 1,000 cases last year, also plans to move statewide within a year and to go public within two years, selling shares to investors such as General Motors does, Trotter said. Eventually, the company expects to operate in six Western states, he added.
There are a number of attorneys and former judges involved in private judging throughout the state, but most operate as sole practitioners. What makes Judicial Arbitration different is its size and plans to expand.
In a private placement last month, 15 investors--including Trotter--paid $306,250 for 34.4% of the stock--an average of $1 per share. Additionally, Peter C. Donald, the company’s president, bought 9.4% of the stock for an undisclosed sum. Knight, who started the firm in 1979 after retiring from the Orange County Superior Court bench, owns the remaining 499,750 shares.
Trotter, who owns 9.3% of the company, said he will make about the same salary as an official of the company--he will be in charge of drumming up new business--that he made as an appellate court justice.
He calls the position he plans to take as senior vice president “a wonderful opportunity and a great challenge” to help relieve the congestion in the public court system.
“I’m absolutely convinced that most civil cases should be resolved outside of court,” Trotter said. “It takes too long,and it costs too much to go to trial today.”
Could Boost Respect
His decision to join his old friend Knight is sure to boost respect for private judging firms, while rekindling the controversy over what some people derisively call the rent-a-judge business.
Primarily because of court delays and litigation costs, private judging began gaining popularity a decade ago. Retired judges who still wanted to keep active found they could make as much money as they did on the bench in only half the time.
Private judges in California can hear any dispute that both sides agree to submit to them. The public court, however, must give its approval for a private judge to hold a formal trial. But private judges can arbitrate, mediate or hold settlement conferences and can act as fact-finders for the public courts.
Most of the private jurists’ work involves business disputes, as well as a large share of the state’s personal injury cases. Usually, they can render decisions quicker and more efficiently than public courts, making them attractive to impatient corporations.
“Business can live with a decision, but business can’t live with no decision, especially for five years,” Knight said.
While nearly all the states allow some form of private judging, California has been at the forefront of what public officials acknowledge as a growth industry.
Opposing Views
Six years ago, leaders on the bench and in the bar panned private judging. Rose Elizabeth Bird, then California’s chief justice, assailed the concept of rent-a-judge as one that sanctioned “closed trials in law offices or courtrooms.” She called private judging “a quasi-private judicial system for the wealthy.”
But Chief Justice Malcolm M. Lucas, her successor, is less inclined to fault the concept.
“I finally came down on the side of (private judging),” he said Monday. “Every long and complex case that is taken out of line and is tried separately through some alternative dispute resolution allows the common folk like you and me to move along much quicker.”
Lucas pointed out that the Los Angeles County Superior Court had 42 civil lawsuits waiting for trial last week, with not a single courtroom available.
The backlog is such that civil cases can take five years to go to trial. And this summer, some civil courts are going to be hearing the backlog of criminal cases, further jamming up the civil system..
In Orange County, civil cases take three years or more to get to trial. And more than two-thirds of the appellate court’s caseload is civil. No other appellate division in the state has more than half its docket filled with civil cases.
State Atty. Gen. John Van de Kamp said Monday that he believes private judging is “a growth industry” that relieves some of the burden on the courts but lures good judges off the bench before retirement with promises of “making a lot of money.”
‘Needs’ Hard Workers
“The bench needs hard-working people on it,” Van de Kamp said in a telephone interview from Coeur d’Alene, Ida., where he is attending a conference. “I hate to see premature departures because this (private judging) appears to be economically beneficial.”
In a recent interview, Trotter and Knight rebutted much of the criticism of private judging.
“Where is it written that disputes have to be resolved in the justice system?” asked Knight. He pointed out that former U.S. Chief Justice Warren Burger advocated the use of alternative means to resolve disputes.
“We’re not trying to replace the public courts,” Knight said. “Our system has as its basis people agreeing to use the system.”
Trotter said the company would not handle civil cases where individual or constitutional rights are involved.
Business disputes, however, provide a fertile field because, he said, “the flow of business is impeded by court delays.”
The private judging business is geared for speed.
Knight’s company, for instance, is not bound by court rules when the litigants decide to try their cases in some way other than a trial.
In one recent proceeding involving five lawsuits between two companies, a lawyer swore in a corporation’s entire seven-member board of directors at one time and questioned each about events that occurred at a board meeting.
‘Orderly and Quick’
“He’d ask one person to recall what happened at the meeting, then ask the next one if he could add anything more,” Knight said. “He turned what seemed like chaos into a very orderly and quick event.”
The case, scheduled to last a year in trial in Superior Court, was over in three weeks before three retired judges, he said.
Trotter and Knight also took issue with the charge that private judging is closed-door justice for the rich.
First, the company can open its proceedings to the public as long as the litigants agree, Knight said.
Also, privately judged trials are subject to appellate court review and the company’s other procedures are subject to Superior Court review. And the company and its judges would not last long if their integrity is compromised by claims of favoritism. “The marketplace will take care of any bias,” Knight said.
Finally, the cost of a private trial is less than a public one, Trotter said.
Attorney fees would be greatly reduced, he said, because a private court can complete in three days what would take 10 days to try in Superior Court.
Knight’s company charges $250 an hour--$125 an hour for each side. Half the money goes to the retired judges and half to the company for the support services it provides--hearing rooms, secretarial services and so forth.
“One way or the other, you pay. But with us, you pay less,” Trotter said.
Work as They Wish
The retired judges who work for Judicial Arbitration are independent contractors, not employees, and decide for themselves how much work they want to do.
Trotter and Knight began talking about revamping the company two months ago. The result is a restructured corporation with a small group of investors that includes a diverse board of directors representing both sides of the political fence.
Besides Knight and Trotter, an appointee of former Gov. Edmund G. Brown Jr., the board includes public relations specialist Michael Franchetti, who is a former director of finance for Gov. George Deukmejian, and retired Superior Court Judge Bruce W. Sumner, who served as Orange County Democratic Party chairman until he ran unsuccessfully for Congress last year.
Officials of the American Bar Assn. know of only one publicly owned arbitration service, Judicate Inc. in Philadelphia. Judicate officials could not be reached for comment.
