I wouldn't go as far as "jaw dropping." You've got a lawyer from the DNC attempting summary dismissal against a case that's fundamentally designed to air the DNC's dirty laundry - the money judgement is never going to happen but a discovery motion will give the Berniecrats all sorts of things to howl over. Anything he says here won't be evidence in the case if it goes forward. This is a motion hearing, not a court proceeding so it's going to be more free-wheeling. You can absolutely assert that "fairness can't be defined" while also arguing that their actions were fair. Disingenuous? Certainly. Logically tortured? Absolutely. Viable in debate? Not particularly. Viable for summary judgement? Yessir.
I for one would love to see the DNC go through a great deal more soul-searching in light of their colossal failure last cycle but I do not think any of us benefit from setting a "you lost, we get our money back" precedent. The fundamental assertion of the DNC's lawyers is that the DNC has more expertise in selecting a candidate than pure parliamentary procedure and that they have the right to exercise that expertise as they see fit. I'm not sure I agree; I can, however, see their argument. The argument the DNC needs to face is whether or not they put loyalty and nepotism ahead of the interests of their membership and the lawsuit can circle around that? But it'll come down to whether or not the DNC can be civilly compelled to adhere to an external application of their bylaws rather than an internal one and I think that'll be tricky.