Wednesday, September 1, 2010

American Express

WHAT EVERY SMALL BUSINESS MUST KNOW

PROLOGUE

This is a must read for every small business in American… a true story in real time of a small “Mom and Pop” type business that struggles to survive while seeking to upend a 200 year old constitutional injustice. 

Did you know that your business has no rights to defend itself in any circuit or high court in America without being forced to pay an attorney?  And what if your financial damages from a large adversary or even the government are so large that you cannot afford a $400/hour corporate lawyer?

Everything you have worked for, say for the last 30 years, to build your business and reputation… gone forever.  What would you do if you lost your business and could not go to court to defend your company?  Could you start over, even pay your mortgage, or feed your family or send your kids to college?

This constitutional injustice is a little known but silent killer of small businesses.  You say, “But, this could never happen to me.”  Read on… it has happened to me twice!  No small business is safe.  

The following is an actual excerpt from my appeal before the 4th District Court of Appeal in Florida, which was filed on August 31, 2010.  It addresses only the “equity” portion of the argument.  There are two other cases working their way through the courts… one in Iowa and the other in the state of Washington. (complete appeal manuscript is available on request in “.pdf” format)

   
WHERE IS THE EQUITY IN THIS?

Introduction
1.          Heretofore my arguments addressed the cornerstones of case law precedents that have long supported denial of corporate representation. 
2.          The following argument addresses equity law where there are no absolutes; everything is in the balance of fairness and what is in the best interest on the public. 
3.          For the court’s consideration and ultimate decision, I have attempted to unravel this historically complex matter into its core issues of equity, with open and necessary argument of sensitive issues to include judicial prejudices, historical disenfranchisements, the parties affected and possible motives.   
4.          At the turn of the 19th century, there were only 335 corporations.  Corporations were large and powerful, monopolistic, generally disliked, not trusted and viewed by many as a threat to the society at large.  As our nation and laws were developing, corporations were severely restricted in their charter, operational life and freedoms that we now know and take for granted.
5.          Of the sectors in our society having an interest in corporate rights and “personhood,” there are still those people that fear the commercial and political power of corporations and are against all “personhood” type rights as a threat to society.
6.          Secondly, are large corporations in excess of 100 people, but would seemingly have little to no interest in self-representation because these companies would most always have the resources and good sense to employ good legal counsel.  Without the problem of affordability, it would be the rarest of situations where a layperson of a large operating company would choose the aggravation, personal sacrifice and misery of pro se representation of their corporate enterprise and be able to get the approval to do so (i.e. corporate resolution) from the corporation’s Board of Directors.
7.          Small corporations in opposition to the current law comprise the only group significantly, directly and adversely affected by the general rule that prevents corporate self-representation.  This is a large sector of our society.  Small business, under 100 employees with less than $5M total year receipts are estimated from the 2002 U.S. Census[1] to be 5,405,781 firms; 94.8% of all the firms in the United States.  With a conservative estimate of 10 employees per firm the group represents approximately 17.6% of the entire population of the United States.  The point is that this Small Business sector of the population is substantial and likely in the range of 50,000,000 – 75,000,000 people.
8.          The only known opposition to corporate self-representation is the legal community of lawyers.  Otherwise, who is there to oppose and argue against a small group of people, a family or a few friends under a corporate banner, a “Mom and Pop” type business that cannot afford a lawyer’s retainer and $400/ hour fees, to make an appearance in court to deny the false claims and damages sought by a large and powerful adversary?  By the current interpretation of the law in Florida, the Plaintiff’s claims would be presumed by the court to be true and accurate; damages and remedies awarded to the Plaintiff; and “Mom and Pop” would be prosecuted for the felony for practicing law, jailed and fined.
9.          By comparison to the 50,000,000 plus people comprising the sector of small business in 2002, according to the American Bar Association[2], there were 1,128,729 resident and active attorneys in the United States in 2006 and 1,143,358 in 2007.
10.      As such, this petitioner asks the court to decide on balance… is it more equitable for the small business sector to be allowed to defend itself by making an appearance in court to deny false charges and claims… or instead preserve the legal profession claim that the corporate being is practicing law.
Discussion Of Unlawful Practice Of Law
11.      The legislatively controlled licensing of attorneys, along with criminal penalties for offenders, was instituted in the 1930’s depression era.  These were the toughest of times and historically viewed that state licensing of lawyers was largely a move to protect the commerce and enrichment of existing lawyers.  Notwithstanding its illegitimate birth, since then the state licensed practice of law has been put forth and generally accepted as a necessary protection of the public.   
12.      Nevertheless, commonsense and some knowledge of human nature demands recognition that there is a strong human motivation to protect one’s livelihood and that this could be a possible factor in the lawyer community’s argument against allowing non-lawyers equal access and status in a court room… especially when it affects 94.8% of all the firms in America.  
13.      A second and significant motivation against corporate self-representation is to keep unlearned (in law) people out of the courtroom and from clogging up the judicial system.
14.      Admittedly, a person without legal practice and limited knowledge of legal processes adds a burden to the court in maintaining the flow of work while insuring that neither side is given an unfair advantage.  So be it, but as a matter of equity the problem of workflow and courtroom decorum should not even be considered. 
15.      The small business pro se litigant is typically unlearned, financially limited and is desperately trying to saving their corporation, livelihood, loss of employees, loss of family home and property (there is no shield for wealth in small companies… everything is personally guaranteed). 
16.      How can the courts even consider not allowing access to justice; and for the superficial reasons that it may be irritating and more difficult to adjudicate than having a licensed lawyer in the courtroom… never thinking that the cost of hiring a lawyer at today rates makes it economically impossible for a small, financially distressed business to hire an attorney.   
17.      That aside, it seems that the extreme penalty for the unlicensed practice of law suggests professional protectionism. To threaten a law suit for the collection of a debt or to give any manner of casual legal advice, even to your own grandmother, is a felony offense. 
18.      Consider that the corporate spokesperson is allowed to conduct every manner of legal contracting, agreement and civil action, except for the defense of their actions.  Both in logic and equity, this seems unsound and arbitrary.  
19.      Nevertheless, Florida law requires the corporation to pay for justice in the form of a lawyer for its defense of its actions... except in one situation.  The corporate person may represent itself pro se in the Small Claims Court.
20.      This begs the question, if corporate self-representation is acceptable for Small Claims Court, then why not a higher court?  Either the corporate person is engaging in the felonious act of practicing law without a license or not.   It seems, however, that the law is arbitrary.   When the law suit is of “little value”, then the corporate person may practice a “little law,” but when the stakes are higher in value the corporate person may not practice law, lest experience jail time.  It seems that this bifurcated interpretation of “practicing law” exist principally for the enrichment of the legal profession. 
21.      How is it possible to conclude that in the case where a corporate being cannot afford an attorney and cannot even make an appearance to deny false accusations; that this could be in the best “public” interest… to give a judgment to the accuser without any defense by the corporation… a collection of people, indeed the “public” by definition.  Where is the equity in this?    
22.      The law should stand on principle instead of profit.  Self-representation by a corporate person is either practicing law in all courts or it is not.    

Discussion On Disenfranchisement Of Public Rights
23.      Petitioner contends that the right of any person or collection of people to defend themselves is an inherent right of a free society.  The early history of the United States confirms that certain sectors of the public were disenfranchised for reasons believed at the time to be just and good for society.
24.      There are two examples, and perhaps more, of where people living in the United States have been barred from the courts.    In 1824, it was interpreted by the legal fraternity that the US Supreme Court in Osborn v. President, Directors & Co. of the Bank of the United States ruled that a corporation could not represent itself pro se in a Court of Law.  Then thirty three (33) years later there was the Dred Scott decision (1857), ruling that slaves were not citizens but chattel and that they could not sue in court.[3] 
25.      The first point is that in the early 1800’s, the rights of people and corporations were viewed differently than now.   For those that held the power, people’s rights were secondary to what could be deemed, as they viewed it, good for commerce and the protection of property (e.g. the political franchise of women’s suffrage was not recognized in the United States until 1920.)
26.      No attempt is made to describe the relative miseries of the groups disenfranchised from the courts, but there are pungent similarities in the characteristics of the groups and in treatment by the courts.  Most notably is the preconceived perpetuity of the injustice. 
27.       Ironically the U.S. Supreme Court, our trusted purveyor and protector of civil rights; the final arbiter and ultimate trustee of justice… made the adverse rulings to disenfranchise large groups of people of a basic right and then denied these same people access to the courts forever! …no further discussion.  The State of Florida, as with all states, has blindly followed the U.S. Supreme Court’s disenfranchisement standard.
28.      In the two examples, the people affected in both groups were largely ignorant of the law, financially distressed, unskilled in legal debate and deemed unworthy to approach the court.  Moreover, the groups were weak, without leadership, consumed with their daily labor and most of the people did not even know of or understand their disenfranchisement and what it meant.
29.      As for the people in small business, I bear testimony that in the 20 years since I learned of this injustice in the loss of my first business… I have never spoken with any small business person hence that is aware of their disenfranchisement to our judicial system… that they cannot even deny false charges brought against their businesses; seemingly, because attorneys don’t want you to practice law (by their definition of what Justice Marshall meant to say 186 years ago).  Instead, the courts have deemed it more equitable for you to quietly go out of business, lose your income, lose your home, lose your credit, lose your sleep, have your children withdraw from college, lose your retirement, lose your health insurance, experience anxiety attacks, and suffer all types of stress related maladies.  Where is the equity in this?  
30.      I beg of the court to comprehend the gravity of this matter.  When people that have worked hard all their lives, learn of this injustice, it is too late… they often lose everything and nobody knows or cares.   It happens all the time.  

Injustice of the Large v. Small
31.      Whenever a very large entity (e.g. company, corporation, bank, government agency, etc.) severely damages a very small company financially, the small company’s cash flow can be decimated in vendor bills and payroll in a one month’s business cycle (e.g. liquidity can drop from $20,000 - $30,000 down to $1,000 - $2,000).  As illustration, at the end of a construction job when a general contractor does not pay the final month’s bill and the 10% job retainer rightfully owed and due to a small subcontractor… with only $1,000 or so in the bank, the subcontract cannot pay an attorney $400 an hour to sue the general contractor.  The subcontractor often just goes out of business, ruined.  Worse yet the general contract will often sue the subcontract for some “trumped up” damages of the job site and since the subcontractor cannot make an appearance in court, the general contractor will get damages awarded and never pay any of the subcontractor’s final bill or retention. 
32.      It happens all of the time… where the large corporate entities and the government agencies crush small businesses; no less an ugly blood sport of our free enterprise system where the courts are the weapon of choice for the coup de grace. 

Protection of the Public Interest
33.      It would be unthinkable and unspeakable for the legal profession to admit that it really is the money and denying corporate self-representation is for the enrichment and protection of their profession.  Likewise it would seem difficult to admit that corporate self-representation is denied because unlearned litigants are not welcome in the court. 
34.      The only plausible reason or defense is that a licensed attorney must be used for the protection of the public (i.e. the “modern” reason for having a state licensing system).  Since this is a civil matter, “protection of the public” would necessarily mean protection of the property of the public.  
35.      In the balance are some 50,000,000 plus people, in subgroup collections of people that potentially need access to the courts in their corporate being but cannot afford an attorney. Affordability is the overarching characteristic that identifies this sector of society’s need for pro se representation. 
36.      In the best interest of the public for the “protection of property,” the only question under the current Florida Law — 
“Is it better to lose your property because you have no access to the court?
or
Is it better to hire an attorney for $400/hour and lose your property 3 hours later?”
37.      “Where is the equity in this?”  On one hand there is much suffering, financial destruction, loss of jobs and health… and on the other hand… nothing.  Absolutely nothing…, except a rule to keep us business people from practicing law; something we would never attempt unless in a desperate financial situation that offers no other option.  The legal profession is safe from us corporate laypeople, practicing law in the back alleys.  We only wish to defend ourselves in a court of law for a last chance that the truth will prevail and we survive to return to our businesses and livelihoods.
38.       Surely the legal profession cannot believe any harm would come to their commerce by allowing corporate self-representation; would not they be employed by the large adversary on the other side; would they not have the advantage of legal process (i.e. case law research, gathering testimony, production of records, motions, defenses and prosecution) weigh heavily to their favor?
39.       What harm could come to this nation by allowing public access to the courts.  
“Where is the inequity in this?”

Conclusion
40.         There is none.  No meaningful harm can befall anyone (not even attorneys) in society by allowing a collection of people to protect their property.    This injustice has been perpetuated since 1824; and that unto itself is now the spurious basis for any challenge to the rule… a quick citation to Osborn v. United States Bank, 22 U.S. 738, 830 (6 L. Ed. 204) (1824), and the time worn cliché…  “Not only has this principle long been recognized, it has been almost universally accepted.”[4]  This could have been the watchword for those supporting slavery or those against women’s suffrage or any disenfranchisement of liberty.
41.      There is no time honor to an injustice.  Passing time only magnifies an injustice.  We are speaking here of a basic right to defend our property, where access to the courts is being denied, bought and sold.
42.      The Constitution of the State of Florida states, Art. I, Section 21. Access to courts:
“The courts shall be open to every person for redress of any injury, and justice shall be administered without sale, denial or delay.”
43.      This right is derived directly from the Magna Charta.
No right shall be sold, delayed or denied. - Magna Carta, XXX (1215)
To none will we sell, to none will we deny, to none will we delay right or justice. - Magna Carta, XXIV (1215)
44.      The Statues of Florida do not diminish the rights of a corporation from those of a natural person.  The rights of a person are guaranteed unless certain and specific rights have been denied by statute.
45.      As to legal authority and representation, the corporate person must perform all of it functions and activities via authorized representation,  performing all manner of legal acts in personnel matters, contracts, leases, product sales, stock sales, stockholder matters, banking and tax matters.  All of these legal acts may be performed by laypersons that have been duly authorized to act on behalf of the corporation.   Like the natural person, the corporate person is not considered to be practicing law because these services are being performed where the corporation has a proprietary interest.  This is no different than any other licensed service that the corporate person may perform for itself but not for others.
46.      I beg the court to look beyond the time worn clichés and decide this Writ of Certiorari on the merits of the arguments… that case law does not support this law and equity law would not allow this law.   
47.      WHEREAS, Petitioner begs the Court to give precedence to the Florida Constitution and statutes; to uplift the people's right to defend themselves and their property, individually and corporately, against wrongful prosecution; and to insure that the basic right of access to the courts will never again be denied to anyone in the State of Florida.  

Respectfully submitted this the 29th day of August, 2010.

___________________________________________   
John M. Cockerham, pro se
5641 Atlanta Street
Hollywood, FL 33021

Phone: (954) 605-9883
Fax: (954) 963-4020



[1] Statistics of U.S. Business, 2002, Table 3., “Receipt Size of Firms, 2002,”  http://www.census.gov/epcd/www/smallbus.html#EstabSize

[2] ABA Website,
[3] Dred Scott v. Sandford, 60 U.S. (19 How.) 393 (1857)
[4] “A corporation must be represented by an attorney in Georgia,” Atlanta Business Attorney Blog, Published by Meriwether & Tharp, LLC, March 27, 2009