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Court transcrtipt of "Pacifica's" request to pack the board being refused 7-17-01 |
( as posted on the message board at: www.goodlight.net/wbai )
court reporter
July 17 Court Transcript part 1
Thu Jul 26 13:18:14 2001
1
1 P R O C E E D I N G S
2 July 17, 2001 Morning Session
3 ---oOo---
4 (Whereupon, the proceedings were held in open court with the
Court and Counsel present.)
5
6 THE COURT: Good morning. Preliminarily, this is the
7 matter of Adelson vs. Pacifica Foundation and related cases.
8 Could counsel state their appearances for the record.
9 MR. SIEGEL: Good morning. Dan Siegel and
10 Hunter Pyle on behalf of David Adelson, et al.
11 MR. FRUCHT: Ken Frucht on behalf of Robinson and
12 Kriegel.
13 MR. GROSS: Terry Gross on behalf of the Spooner
14 Plaintiffs.
15 MR. TEMCHINE: Daly Temchine and Robin Dunaway on
16 behalf of the Foundation Defendants.
17 THE COURT: Good morning.
18 MR. FOX: Timothy Fox on behalf of Tomas Moran, Peter
19 Bramson and Leslie Cagan.
20 MR. BELSKY: Adam Belsky on behalf of the Spooner
21 Plaintiffs.
22 MR. MAJESKI: Eugene Majeski on behalf of the same
23 Defendants as Mr. Fox.
24 THE COURT: Did we get everyone?
25 As a preliminary matter, I think Mr. Knox, the court
26 attendant, has announced there shouldn't be any recording,
27 videotape or otherwise in these proceedings. The matter is,
28 of course, of record by virtue of the certified shorthand
LINDA SKAGGS, CSR # 8253
2
1 reporter's transcript and a transcript is available at your
2 request if you so desire.
3 But did you want to be heard on the matter,
4 Mr. Siegel?
5 MR. SIEGEL: Yes, your Honor, briefly. I understand
6 the Court's policy or the general policy, but as you know
7 this is a matter that concerns a radio station and a radio
8 network and our clients are interested in being able to
9 record these proceedings and not to supplant the official
10 record of the proceedings, but rather to obtain a recording
11 that could be used and played in part over the radio and
12 make the request in that regard and would request that the
13 Court consider that issue not only with respect to today's
14 proceedings but other proceedings as this case develops. I
15 think there is a strong public interest in this particular
16 case and, again, the electronic media is the preferred way
17 to provide a record of the court proceedings to the public.
18 THE COURT: All right. Does anyone else want to
19 comment on this?
20 MR. SIEGEL: I spoke with Mr. Temchine and the
21 Defendants do not be object to this request.
22 THE COURT: If they want to make a record they're
23 free to. If they don't, that's fine as well.
24 MR. TEMCHINE: Your Honor, the request of Mr. Siegel
25 is one to which I obviously would have to sit here because
26 any other answer would be suggested I'm trying to hide
27 something. And so I don't object.
28 THE COURT: Very well.
LINDA SKAGGS, CSR # 8253
3
1 I'm not inclined to permit videotape or tape
2 recording of the proceedings. This is a public process and
3 of course we do have a reporter in this department and all
4 of the departments of the Superior Court. Periodically and
5 occasionally even there are cameras permitted, not to record
6 the proceedings but simply to take pictures of the
7 proceedings. But I'm not inclined to allow tape recording
8 or videotaping of these proceedings.
9 All right. Let's discuss the merits. I think as a
10 preliminary matter, Mr. Temchine, I couldn't tell, and I'm
11 not sure, although I did not see it reflected in the papers
12 when these four directors resigned, Mr. Palmer, Mr. Acosta,
13 Ms. Van Putten and Ms. Lyons. Do you know when they
14 resigned?
15 MR. TEMCHINE: The most recent resignation was that
16 of Ms. Van Putten. I believe that was about two - three
17 weeks ago. Mr. Acosta preceded her I believe by a week or
18 so and Mr. Palmer by one or two weeks.
19 THE COURT: How about Ms. Lyons?
20 MR. TEMCHINE: I'm sorry?
21 THE COURT: Ms. Lyons.
22 MR. TEMCHINE: Ms. Lyons was shortly after the March
23 meeting in Houston of the Board of Directors.
24 THE COURT: Several months ago.
25 MR. TEMCHINE: Several months ago.
26 THE COURT: What is the -- the next thing I would --
27 well, I know there's a debate amongst the counsel with
28 regard to the language of the stipulation and whether or not
LINDA SKAGGS, CSR # 8253
4
1 the particular provision concerning the replacement of
2 Directors or election of Directors or the like does not
3 reference a seven-day time period, it is referenced
4 elsewhere in terms of the emergencies. But putting aside
5 for the moment the discussion about what the language is of
6 the stipulation and what it means and what the parties
7 intended, what's the emergency here?
8 MR. TEMCHINE: The emergency, your Honor is this: We
9 have at least two Directors who believe that their
10 livelihood is being threatened. They wish to resign but
11 they know that if they do resign, the majority -- there will
12 have been a transition in the majority, the Board will be at
13 a deadlock and the circumstances will have changed
14 irreparably. They also have a concern that if they do
15 resign and if a third one of them also resigns, and I might
16 add the only reason as the affidavits show why they are even
17 contemplating it is because of the abuse that they have been
18 subjected to. Ms. Cisco has actually had to sever an
19 important economic relationship she has because of the
20 activities of the supporters. And here we have presented
21 the Court with direct evidence that someone whom the
22 Plaintiffs support, Amy Goodman went to Bangor, Maine to
23 picket a potential client of the enterprise which Ms. Cisco
24 is affiliated. And the result of that was that the
25 enterprise of which she is affiliated expressed its concerns
26 to her about the future of its business and she was forced
27 to resign.
28 I submit, your Honor, that the emergency is very
LINDA SKAGGS, CSR # 8253
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1 clear. You have a group of people who want to go on with
2 their lives but cannot do so because all of the issues in
3 this case will, in effect, be decided by the state and not
4 by the Court. And if --
5 THE COURT: I'm sorry. Say that again. All the
6 issues will be decided by the stay --
7 MR. TEMCHINE: The street.
8 And there are two irreparable injuries here. The one
9 is to the Court's jurisdiction to decide whether or not
10 these Defendants are properly on the Board or should be
11 removed from the Board. That is the issue before this
12 Court. As it is --
13 THE COURT: That's the ultimate issue in terms of
14 trial, correct?
15 MR. TEMCHINE: Correct. That is the ultimate issue
16 and the authority to decide that ultimate issue is being
17 systematically taken away from the Court through coercive
18 activities of individuals, coercive unlawful activities.
19 THE COURT: What about -- why not get a restraining
20 order in terms of workplace harassment and other -- aren't
21 there other remedies for people who are being imposed upon
22 in their private lives and having their business
23 relationships impacted? Aren't there other remedies
24 available?
25 MR. TEMCHINE: Ordinarily, yes. How do you get a
26 restraining order against hundreds of people? How do you
27 get a restraining order when you have anonymous harassment
28 and what good does it do to get a restraining order against
LINDA SKAGGS, CSR # 8253
6
1 one individual when there are others perfectly willing to
2 pick up the slack. And all that that agenda, that theory,
3 that practice of harassment is laid out in exhibits we have
4 submitted to the Court. So a restraining order against one
5 or two or three individuals will do nothing. And the folks
6 who are engaging in that activity know that very well.
7 There is -- the only way my clients can attempt to
8 restore their lives to some kind of civil order is if they
9 resign. On the other hand, if they resign, the issue
10 whether they should be on the Board, whether they are
11 legally on the Board is taken out of the hands of this
12 Court. They will never be able to make that case that they
13 are properly on the Board. And so by a process of erosion
14 this Court at one is being slipped of its jurisdiction and
15 my clients are being slipped of their rights. And indeed
16 that was expressly recognized.
17 We have in the courtroom a Miss Leslie Cagan. She
18 appeared on an interview show by Amy Goodman yesterday and
19 Ms. Cagan will tell you one of the things she said is that
20 the process is working, and she wasn't referring to the
21 process in this court. She was referring to the process of
22 compelling resignations. We will be preparing an
23 authenticated transcript of that issue and be submitting it
24 to the Court. Ms. Cagan is in the courtroom to tell the
25 Court whether I have stated the truth or not.
26 The emergency is, your Honor, that we can no longer
27 ask the Foundation and the Directors can no longer ask these
28 individuals to put their lives at risk. They derive no
LINDA SKAGGS, CSR # 8253
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1 compensation from the Foundation for their services; they
2 need their jobs. And the only way they can stay as
3 Directors to vindicate their rights is if they give up their
4 jobs, and they can't do that. So the idea would be that no
5 harm can occur to the Plaintiffs if there is an election
6 because the new Directors, if any are elected, would be
7 subject to the same legal attacks.
8 THE COURT: Why can't that election process take
9 place after 30-days' notice as opposed to seven days?
10 MR. TEMCHINE: Because these -- at least two
11 Directors were ready to resign last week. They agreed to
12 see whether an election could be held. If there is no
13 election, they cannot withstand the loss of income; the
14 harassment. Now, that may be cheering to the Plaintiffs,
15 but I think they ought to be a matter of great concern to
16 the Court because if this Court does not allow this election
17 to go through, it will have, in fact, rewarded -- there is
18 no way that as long as these folks are Directors that I can
19 protect them, that the Courts can protect them and their
20 livelihood. They have families, they have to earn a living,
21 and I don't see how this Court can count as a result which
22 is unjust, is the product of violence, and it's just
23 complete violent interference in the Defendants' life
24 activities.
25 THE COURT: Is there anything in the nature of
26 regulatory actions that is pending insofar as the license of
27 the radio station?
28 MR. TEMCHINE: No, there is not.
LINDA SKAGGS, CSR # 8253
8
1 THE COURT: The fact that Directors are -- have
2 resigned and are threatening to resign has not implicated
3 any action by the FCC or anything of that nature?
4 MR. TEMCHINE: So far a majority of the members of
5 the Board have not resigned. As is indicated in the briefs,
6 a gradual turnover is not occasion for regulatory concern.
7 But if there is a drastic change in the composition of the
8 majority of the Directors in a short period of time, then
9 that has to be reported and the FCC then can take action,
10 but we don't know. And what the risk that we're concerned
11 about is what the FCC would do if the resignations were not
12 voluntary in nature, had not been voluntary, and that the
13 majority then in place after the resignation was in place
14 only because of the coercive removal of the majority. I
15 don't know what the FCC would do in that case. Its never
16 been confronted with that issue. But common sense suggests
17 that when any regulatory agency looks at a forceable
18 turnover involving acts of personal violence, involving
19 tortuous interference with the lives of Directors, that that
20 would concern them. Perhaps the Plaintiffs are willing to
21 take that risk with the licenses; the Defendants are not.
22 And so the bottom line is this, your Honor: No harm.
23 No harm can be done to the Foundation, to the Plaintiffs, if
24 these elections are held. First of all, the Directors by
25 virtue of the stipulation can take no significant actions of
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court reporter
July 17 Court Traanscript part 2
Thu Jul 26 13:20:01 2001
26 any kind without the consent of the Plaintiffs or the
27 consent of the Court. They can't stop funding of national
28 programs, they can't sell any material assets, they can't
LINDA SKAGGS, CSR # 8253
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1 even negotiate the sale of any assets. All of the issues
2 that would be of concern if a Board were to act are subject
3 to the stipulation.
4 And moreover, if the Court finds ultimately, although
5 I don't think it will, but if it does find ultimately that
6 the present Board is improperly constituted, then all of the
7 Directors, the new ones, the ones who remain, including the
8 class claimants will be removed. That power doesn't
9 disappear; it remains the same.
10 So the only result of a denial to the Foundation of
11 the ability to go forward with this meeting is that it will
12 compel two Directors -- at least two Directors who have
13 served, is beyond the call of duty, who have taken
14 incredible amounts of abuse to resign and without ever
15 having the ability to make their case to the Court that they
16 should not be forced off the Board.
17 THE COURT: All right. Mr. Gross.
18 MR. GROSS: Mr. Temchine uses a lot of emotive words
19 about coercion and illegality. We have a lot of issues with
20 that. We have -- I guess there are a number of points.
21 There was what Mr. Temchine says is what is happening that
22 is improper, illegal, tortious, I'm going to address that
23 later. I'm going to address the FCC issue later. I think
24 the first thing that I want to address is really about what
25 the damage is that is happening here.
26 Mr. Temchine started by saying that this will -- that
27 if some Directors resign, that will take jurisdiction away
28 from the Court. But often there is attrition or change in
LINDA SKAGGS, CSR # 8253
10
1 Directors of corporations, and that doesn't involve the
2 Court. It's just what is really happening here right now is
3 that the Defendants are engaged in a fixed election that
4 violates all principles of corporate governance. This was
5 addressed briefly in our papers but not in detail because of
6 the shortness of time we've had here.
7 Basically, this is a kangaroo election. There has
8 been no attempt to arrange this meeting with the minority
9 Directors. There are twelve Directors on this Board. Five
10 Directors have had no participation. What they haven't been
11 asked, two of the Directors have put in declarations about
12 their lack of availability at the time of this meeting. In
13 addition, none of these -- none of the Directors, though
14 they have asked, have been informed of how they can
15 participate in this meeting. This meeting is supposed to
16 take place by telephone. The notice said send us an E-mail
17 if you want to participate, we'll give you the information.
18 None of the five minority Directors have been informed how
19 they can participate in anyway whatsoever.
20 There has been no resumes or information about these
21 new candidates have been submitted to any of the minority
22 Directors. They have no -- some of them clearly well-known
23 names, but they have no other information about them. None
24 of the normal procedures are followed.
25 In fact, the bylaws provide that -- these are the new
26 bylaws that have been adopted rather than the '84 bylaws.
27 I'm just saying that these are the ones that the Defendants
28 claim are operative, and they say in it that in Article 3,
LINDA SKAGGS, CSR # 8253
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1 Section 2: "Candidates for Directors may be nominated by
2 the Foundation's Board governance and structure committee."
3 And there's a footnote with a section that talks a little
4 bit how the governance committee is supposed to nominate
5 Directors. The governance committee has not met to be able
6 to do this. The minority Directors -- some of the minority
7 Directors are on the governance committee. There's been no
8 meeting to follow-up on the normal procedure. There happens
9 to be a governing of the governing Boards. There happens to
10 be an executive committee. That executive committee hasn't
11 met because some of the minority Directors are members of
12 that committee, they've stated in their declarations.
13 So who's making the decisions here? What is
14 happening here? Basically what's happening is that there is
15 right now some group that is not following any corporate
16 governance, just saying we're going to handpick people.
17 We're going to put them on. How are the minority Directors
18 supposed to decide to vote?
19 Mr. Temchine says two Directors said they're going to
20 resign. That's never been told to the minority Directors.
21 They don't know who that goes. Goes only to if there have
22 been letters of resignation, potential resignation. They
23 haven't been circulated. Basically what's happening is the
24 minority Directors are being deprived of their ability to be
25 able to participate in this election and to be able to
26 discuss with the other Directors who is appropriate to be on
27 here, to nominate other people and conduct a real election.
28 This is not a real election. It is a fixed election and the
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1 Defendants are trying to make the Court complicit in this
2 violation of corporate governance.
3 Now, moving to what Mr. Temchine has said about the
4 illegality and tortious activities. I point out in some of
5 the exhibits, though Mr. Temchine in his papers tries to
6 claim that the Plaintiffs are complicit or have some
7 participation in what's going on, in some of the exhibits
8 that Mr. Temchine's declaration and letters that he's
9 writing to counsel he explicitly says I'm not claiming any
10 of the Plaintiffs are participating in anything that's going
11 on. That's the first thing.
12 I think the second thing that we should look at here
13 is the fact that there are labor management issues that are
14 going on at Pacifica. That at Pacifica there have been
15 employees that have been subject to job actions. That have
16 been -- their programs have been taken off the air. They've
17 been told they can't say things or do things; that they've
18 been shut down in the middle of programs. These are people
19 who are involved. That's who Amy Goodman is. She's an
20 employee.
21 If you look at the declaration -- at Ms. Cisco's
22 exhibit to her declaration, Exhibit B talks about a speech
23 that Ms. Goodman gave. And at that speech she's being --
24 she's been invited to speak. She's the keynote speaker in
25 Maine at a fund raising drive for a local radio station, and
26 she's talking about Pacifica. It does mention in there at
27 the end that there is some demonstration that's planned.
28 Doesn't say Ms. Goodman's participating, she's leading. It
LINDA SKAGGS, CSR # 8253
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1 says there's a demonstration planned at some other entity
2 for the next day, and I assume that that's what the
3 Defendants are talking about. Though Ms. Cisco's
4 declaration, if you look at her declaration it does not say
5 what they say it says. Which is that she was forced --
6 because of some demonstrations at some clients she was
7 forced to do something.
8 Actually, I think what they say in their brief on
9 page 2 is that picketing of prospective clients and business
10 enterprise of which Ms. Cisco has a professional
11 relationship which resulted in this Director to be forced to
12 be disassociated with this enterprise. Doesn't say that in
13 her declaration.
14 Number two, under labor management law it's
15 permissible to have these kinds of demonstrations. There's
16 nothing illegal about that. The Courts have stated that
17 these are perfectly legal proper types of activities in
18 these types of situations.
19 So -- and I think if you look through the
20 declarations that you have of the existing Directors, they
21 submitted declarations from three former Directors and five
22 of the sitting Directors. If you look at what the harm is
23 that they claim there is, most of them are talking about
24 telephone calls, E-mail and faxes.
25 But you have Cisco, she talks about there was a sign
26 in her neighbor's yard. There were flyers in the
27 neighborhood.
28 Again, Goodman spoke at a radio station fund raiser.
LINDA SKAGGS, CSR # 8253
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1 She says there was some communication that interfered with
2 her ability to pursue her livelihood. What that was, if you
3 look at the exhibit, there was a Freedom of Information Act
4 to the United States Civil Rights Commission asking for
5 information concerning any contracts that the Civil Rights
6 Commission had with Ms. Goodman or Epstein, Becker & Green
7 trying to find out if there was some interrelationship
8 there. This is what government is about. We're in a
9 democracy. These are legitimate activities.
10 If you look at Ford, all that Ford said is that he
11 had E-mail and calls. That John Gonzales who was a former
12 employee who had similar job actions, that says he sent
13 E-mail or encouraged E-mail. I'm not sure that's quite
14 supported by the record. It says he operates a website that
15 encourages persons to terrorize the Board members. The
16 Court should look at what that exhibit is that they put in
17 about what this website -- and the website does talk about
18 having some demonstrators to conduct yourself legally. This
19 is what it talks about. That people shouldn't do illegal
20 actions. It's supposed to be peaceful. That's what's
21 there.
22 Johns, he just talks about telephone calls and
23 E-mails.
24 Chambers, he talks about -- she talks about E-mail
25 and telephone calls and calls at her employers. And the
26 other things she talks about is she says there's an intruder
27 in her home at some point. And there's a conclusory
28 statement she believes that that has something to do with
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1 the Pacifica protest. There's no police report. There's no
2 evidence that there's anything like that. She says there's
3 picketing. One of the -- picketing at her home. From her
4 understanding it was an hour and a quarter. And, again,
5 this -- she doesn't say who is picketing. Again, that type
6 of activity is protected by the Courts in labor management
7 issues.
8 THE COURT: Mr. Gross, the relief that you're seeking
9 here this morning is to restrain -- have the Court issue a
10 temporary restraining order including the meeting that was
11 scheduled today at noon Pacific time?
12 MR. GROSS: Yes, we're asking to enforce the
13 stipulation that --
14 THE COURT: Which would in effect -- just to be
15 specific -- to basically say that the notice provided of
16 this meeting today at noontime is inadequate per the
17 stipulation and if that were granted, in effect, then a new
18 notice could go out noticing a further meeting for purposes
19 of election of Directors in 30 days, correct?
20 MR. GROSS: That is correct, your Honor. And in
21 those 30 days there are several things that would be able to
22 happen in that period. In that period if the election is
23 going to be held, at least the minority Directors would be
24 able to participate, would be able to find out who the
25 candidates are, be able to have this election occur in a
26 proper manner which is --
27 THE COURT: You'd also be seeking further relief by
28 way of a preliminary injunction restraining the process
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court reporter
July 17 Court transcript part 3
Thu Jul 26 13:21:02 2001
16
1 entirely, correct?
2 MR. GROSS: We might. It would depend on what's
3 happening with the process and who the nominees are. It
4 might be that at the time the nominees come in we say, hey,
5 this could be reasonable, let's put some people up and see
6 what happens.
7 THE COURT: I guess the question is if the Court
8 issues a preliminary -- a temporary restraining order this
9 morning, what would be the duration of that restraining
10 order and what would follow the issuance of that restraining
11 order in terms of further proceedings. Would it just simply
12 restrain the meeting this morning and allow a new notice to
13 go out with regard to a meeting for the replacement of the
14 Board members who have resigned and no further briefing to
15 further Court schedules?
16 MR. GROSS: I think that the reason that we framed
17 our motion or application as an application to enforce the
18 stipulation is that what we're asking for initially is just
19 an order from the Court that says under the stipulation it
20 requires 30 days to have notice for this meeting and that
21 we're going to enforce that, and that's all the Court needs
22 to say. Needs to say that that's what it says. There's --
23 and that the Defendants can't hold this meeting and if they
24 want to hold a meeting, they have to give 30 days' notice
25 pursuant to the stipulation, no further briefing, nothing
26 else. If the Court does not interpret the stipulation as we
27 the Plaintiffs intended it, as we think its plain meaning
28 reads, if it does interpret, that's when we would be asking
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1 for a temporary restraining order, and we would want further
2 briefing on a number of these issues to put in more evidence
3 on this and then if that's what -- if the Court wasn't
4 inclined to enforce the stipulation, does not read it,
5 interpret it the same way as the Plaintiffs do, then the
6 Court could put off the meeting, doesn't have to put it off
7 for 30 days. It would be reasonable to put it off for a
8 reasonable amount of time to allow further proceedings and
9 briefings and to get in -- be able to get real evidence in
10 front of your Honor rather than giving offers of proof or
11 statements as to the effects of this.
12 THE COURT: All right. Does anybody else want to
13 speak on behalf of the Plaintiffs briefly?
14 MR. FOX: Tim Fox on behalf of Directors Moran, Cagan
15 and Bramson. They're the Defendants and Cross-Complainants.
16 I wanted to amplify on one thing that Mr. Gross has
17 already said with regard to the inability of the minority
18 Directors to participate meaningfully in this election.
19 They've not been provided with anything other than the
20 names, unadorned, of the five proposed candidates. It's not
21 been made clear how many people are going to be elected at
22 the meeting today and my clients have been deprived of the
23 meaningful opportunity to evaluate those candidates.
24 I did want to point out that I heard from my client,
25 Ms. Cagan, they received afterhours last night, finally,
26 after multiple requests, some information as to how to
27 participate in today's conference call. I've only heard
28 that from one of my clients. I don't know if the other
LINDA SKAGGS, CSR # 8253
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1 minority Directors have even been given the 1-800 number to
2 call in and participate at this meeting at noon.
3 THE COURT: Mr. Siegel.
4 MR. SIEGEL: Yes, briefly, your Honor. I know the
5 Court said it didn't want to focus very much on the language
6 of the stipulation.
7 THE COURT: Not that I didn't want to. I wanted to
8 hear what the emergency was first, but I understand there is
9 some significant legal arguments with regard to the
10 interpretation of the stipulation.
11 MR. SIEGEL: And I would suggest that the stipulation
12 is clear; it says no Directors shall be elected. That's
13 what this case is about, primarily, is the election of
14 Directors of Pacifica. And when the Plaintiffs agreed to
15 forego the Court's ruling on the request for a preliminary
16 injunction, it was with the understanding that the status
17 quo would be maintained. And what we have here is not
18 simply a maintenance of the status quo, but an effort to go
19 beyond that by the extraordinary procedure which the
20 Defendants have undertaken to elect new Directors overnight
21 in a way which Mr. Gross pointed out is not even consistent
22 with the bylaws which we allege and will prove were
23 illegally adopted in the first place.
24 But I also wanted to say a few words about the issue
25 of whether this is an emergency. So if the Court doesn't
26 agree that the stipulation is clear and the 30-days' notice
27 is required, I think there's some conceptual issues here as
28 to what an emergency is. I would submit that the only time
LINDA SKAGGS, CSR # 8253
19
1 there could be an emergency which would require the election
2 of Directors of Pacifica if the number of Directors became
3 diminished to the point that the corporation could no longer
4 conduct business as required by California law. Certainly
5 having eight or ten or even five Directors is sufficient to
6 conduct business in California.
7 THE COURT: I think the emergency that Mr. Temchine
8 was arguing is one really in the nature of a personal
9 emergency, it seems, in terms of these individual Directors
10 who have offered their resignations and may be about to
11 resign because of pressure and activities brought to bear on
12 their personal lives that have made their service on the
13 Board untenable.
14 MR. SIEGEL: I think that's correct, your Honor, and
15 I want to address that. The maintenance of the Defendant
16 Directors' majority status on the Board, I would submit, is
17 not a matter for the Court's concern. It so happens that
18 there are seven Defendant Directors and there are five
19 Plaintiff or Cross-Complainant Directors. That's a
20 happenstance and there's no evidence before the Court that
21 would allow the Court to conclude that then other than the
22 division of the Directors with respect to this litigation
23 that there are firm political blocks. In other words, the
24 Court cannot conclude based on the material before it that
25 on a vote on a potential issue that the Directors might not
26 align themselves as they do in this litigation. In other
27 words, just because they've aligned themselves in a certain
28 way in this litigation doesn't have any particular
LINDA SKAGGS, CSR # 8253
20
1 significance with respect to any issue that this Board might
2 consider. And, therefore, I don't think the Court needs to
3 be concerned about that.
4 Let's say two Directors resign or four Directors
5 resign. It's kind of a so what, from the perspective of the
6 relief being requested today.
7 The last thing I wanted to say is simply to agree
8 with Mr. Gross, but maybe even go a little further on the
9 issue of the hyperbole that the Defendants are engaging in.
10 There's two levels of hyperbole. If you listen to the
11 arguments made by counsel and look at their memorandum of
12 points and authorities, one would imagine acts of terrorism,
13 gross illegal acts and so on. Then when you read the
14 language of some of the declarations, particularly
15 Mr. Ford's, which uses again hyperbole about harassment and
16 intimidation and so on, again, you might draw a particular
17 conclusion. But when you actually look at the materials
18 that have been submitted, materials downloaded from
19 websites, compilations of E-mail, there's nothing
20 terroristic about that. This is simply give and take of
21 politics.
22 I would submit to the Court serving on a Board like
23 the Pacifica Board is a political act and it requires taking
24 some heat. As the Court may know, I'm on the Oakland School
25 Board. I get lots of E-mail messages. I get lots of
26 telephone messages. I get people coming to meetings and
27 waving signs in my face. That is part of politics. It's
28 not illegal. It may be unpleasant and, of course, I could
LINDA SKAGGS, CSR # 8253
21
1 choose to forego that and resign from the School Board and
2 have someone else appointed. Interfering with one's
3 business relationships at a certain level is also not
4 illegal.
5 The Court I'm sure knows that people picket Macy's
6 and ask people not to shop at Macy's because Macy's is
7 selling fur. People picket The Gap because The Gap sells
8 Nike shoes and Nike shoes are made in countries where child
9 labor laws are not respected. People picket doctors who
10 perform abortions and attempt to influence people not to
11 patronize those doctors because of political disagreements.
12 I would submit to the Court that if the Defendant Directors
13 don't like to be part of a political dispute, they could
14 resign and that's the end of it. But that's not an
15 emergency which would require the Court to either prejudge
16 the ultimate issues in this lawsuit or overrun a stipulation
17 which the parties have carefully negotiated and which they
18 expected to be enforced.
19 THE COURT: Mr. Temchine.
20 MR. GROSS: May I make two more points? I'll be very
21 brief.
22 THE COURT: That way you can catch them all at once.
23 MR. TEMCHINE: I hope so.
24 MR. GROSS: The first thing is the emergency that the
25 Defendants have articulated is some issue about the FCC
26 oversight and needing FCC approval. If you look at whatever
27 authorities are cited, it does not stand for any such
28 emergency. There needs -- for the FCC oversight to be
LINDA SKAGGS, CSR # 8253
22
1 implicated as Mr. Temchine pointed out, it can't be gradual.
2 It has to be an abrupt change, change in a majority of the
3 Board. This is a -- right now it's a twelve-member Board.
4 The majority is seven. Seven members of the Board would
5 have to be replaced. Even if seven resigned, that wouldn't
6 be a change of control because there would still be the same
7 Directors, simply the continuity of control. So only if
8 seven resigned and were replaced could this FCC issue come
9 into place, and that's not here.
10 The second thing is, Mr. Temchine has said these new
11 Directors can take no significant actions of any kind
12 without consent of the Plaintiffs or the Court? That's not
13 what the stipulation says. The stipulation, before you take
14 certain kinds of actions it says you have to give 30-days'
15 notice, then they can do whatever they want after 30-days'
16 notice.
17 THE COURT: Mr. Temchine.
18 MR. TEMCHINE: First, I would like to address the
19 procedural bylaw argument Mr. Gross made. The fact is that
20 the bylaws expressly permit nominations to be made from the
21 floor by Directors. Moreover, the language he quoted says
22 the governance committee "may". It doesn't say the
23 governance committee "must". Therefore, it does not
24 override the provisions of the bylaws that allow Directors
25 to make nominations on the floor without prior notice,
26 without prior advance. That can be done as a matter of
27 right of any Directors. So that if a meeting had been held
28 and a Director wanted to nominate someone, no objection
LINDA SKAGGS, CSR # 8253
23
1 would be made to that on the ground that that person had not
2 been previously identified, had not been previously
3 discussed or that the other Directors didn't have
4 opportunity to investigate them. For all those reasons they
5 might vote against the nominee, but the nomination can be
6 made and can be voted upon, and, therefore, the notice that
7 has been given, and I'm leaving the stipulation aside, is
8 greater than the bylaws would permit since they permit a
9 nomination from the floor.
10 Second, as to the contention that there are blocks.
11 I don't know what case we're talking about. There are
12 blocks that have been present.
13 With respect to Mr. Gross' last point, he starts
14 halfway through, he says there are 12 members on the Board
15 but there were many more not very long ago. There were
16 three more just within the past couple months. So if you're
17 going to do the arithmetic, you can't start with three
18 Directors that have been coerced. I would like --
19 THE COURT: Did I mischaracterize your argument,
20 Mr. Temchine, in terms of this being an emergency that is
21 mor
------------------------
court reporter
July 17 Court transcript final
Thu Jul 26 13:22:05 2001
26 either resign and seek to salvage their lives or they can
27 remain and continue to have their lives interfered with
28 grievously, and I will point out, in an illegal way. From
LINDA SKAGGS, CSR # 8253
24
1 the perspective of a Foundation, of any corporation -- any
2 corporation, for a corporation to be subject to having its
3 Directors removed by unlawful action is a threat to the
4 corporation. What if the current five core Claimant
5 Directors end up being the majority because of -- they're
6 the only Directors -- because they're the only ones that are
7 not being harassed or having their employment interfered
8 with and somebody out there doesn't like what they're doing,
9 and they start being harassed and therefore forced to
10 resign. There is a principle here where a corporation is
11 entitled to have its governing body added to and removed in
12 an orderly, nonviolent process. It's very easy for
13 Mr. Siegel to say that, anyway, this is just ordinary
14 political harassment, ordinary rough and tumble. He's not
15 experiencing it, and neither are his clients.
16 And I would like to address that point and Mr. Gross'
17 point about labor management activity. First of all, there
18 is nothing in this case that involves labor management
19 issues. Second, as a matter of law in a labor management
20 dispute, if an entity other than the employer is picketed,
21 that's called secondary boycott; it's illegal. It is
22 unlawful for, for example, a supplier of a general
23 contractor when the general contractor is being struck to be
24 picketed and when MBNA was picketed, the labor law terms
25 that was a secondary boycott. It is unlawful under the very
26 analogy he chooses to introduce into this case. And it is
27 very clear, I submit to you from Ms. Cisco's affidavit, that
28 the picketing was a picketing constituting a secondary
LINDA SKAGGS, CSR # 8253
25
1 boycott.
2 Now, if you look at the request why we're just
3 exercising our rights, of course they are, but they're also
4 publicizing it to all the press, and moreover, why do they
5 need to know about my firm? Why do they need to know about
6 the National Association of Home Builders? The National
7 Association of Home Builders has no involvement with
8 Pacifica at all. It is Mr. Ken Ford's employer. And as the
9 documents before the Court show what the picketers are doing
10 with the full knowledge of the Plaintiffs, and I will keep
11 repeating that because it is true and because all of this
12 information is available on websites. I can get it, they
13 can get it. That they are telling NAHB, as they told
14 Ms. Cisco's employer, listen, you don't want to have to mess
15 with us, so you either fire Ken Ford or you tell him you
16 will fire him if he doesn't get off the Board. That's
17 secondary activity. It is interference with Mr. Ford and
18 Ms. Cisco and every other Directors' right to freedom of
19 association in two directions; one to associate with their
20 employers and two to be associated with Pacifica. They are
21 coercing them out of the right to have that association. It
22 is in plain civil law terms tortious interference with
23 beneficial economic and personal relationships.
24 Now, as to what difference does it make if we get
25 down to five Directors on each side, well, that's a deadlock
26 and that has legal consequences. It has legal consequences
27 for the corporation. And if we get to the dissident
28 Directors being the majority, we have consequences directly
LINDA SKAGGS, CSR # 8253
26
1 affecting my clients, this litigation, and they can then be
2 manipulated and will be manipulated so that my clients never
3 get their day in court, and that is a fundamental right.
4 They instituted these litigations. They asserted claims
5 against my clients alleging evil things about them. And now
6 they're seeking to take advantage of -- and I will repeat
7 because it's true -- unlawful behavior, behavior
8 constituting what is beyond the labor law as secondary
9 issue, by the tortious interference, a denial of the right
10 of the First Amendment to have the ideas they have and the
11 right of freedom of association to associate with their
12 employers and with the station. All for what purpose?
13 And to respond to the last point about, well, there's
14 nothing to stop the new Directors from acting after 30-days'
15 notice. Well, the answer to that is, if anything that those
16 Directors want to do should in anyway be unlawful or
17 contrary to the interests of the Foundation, and not in its
18 interests, they have this Court to come to. So what is this
19 hobgoblin that they're raising? They're raising the
20 hobgoblin that all of the efforts to eliminate a majority --
21 a majority which has not been proven to have been unlawfully
22 brought onto the Board, will be frustrated. They are
23 complaining that they will actually have to prove this case,
24 these cases that they brought, to prove the merits of those
25 claims in this Court. They have sought relief in this Court
26 on a preliminary basis previously and in each instance where
27 the Court has ruled it has said to the Plaintiffs there is
28 no likelihood of success on the merits. Having failed thus
LINDA SKAGGS, CSR # 8253
27
1 far in Court, they are now asking this Court to accept the
2 activities of personal harassment, personal violence and
3 coercion by denying a perfectly legal, perfectly legitimate
4 hearing, because as I said, nominations can be made from the
5 floor.
6 As to the stipulation, your Honor, you've read our
7 arguments. Bottom line is that it is very, very clear that
8 the parties full-well understood that the term "emergency"
9 was not to be applied solely to unspecified, undescribed and
10 unimagined circumstances, but to any circumstance. There is
11 nothing in the stipulation which permits their reading
12 unless the Court first finds -- and there is no basis and
13 there is no basis for that -- that the parties agreed that
14 no emergency would ever arise with respect to the specific
15 subject matters that are delineated in the stipulation.
16 I submit to you that the correspondence between me
17 and Mr. Pyle makes that clear. That we knew what we were
18 talking about and what we were talking about was
19 emergencies. Not just emergencies having to do with issues
20 not mentioned in the stipulation. Indeed the concept is
21 absurd. Thank you, your Honor.
22 THE COURT: Is the matter submitted?
23 MR. GROSS: I just would like to address the one
24 point. I think the Court should look at the correspondence
25 between Mr. Temchine and Mr. Pyle. It does not state what
26 Mr. Temchine says. I think the stipulation is very clear.
27 It's specific time limits for specific notice limit for the
28 specific types of activities. Paragraph 5 was the only
LINDA SKAGGS, CSR # 8253
28
1 thing that talked about an emergency, and it just says for
2 meetings and the Board of Directors, and, clearly, we
3 believe there is no emergency here anyway.
4 MR. TEMCHINE: Excuse me. This is not a point of
5 argument, just a point of information. I received a phone
6 call this morning as I was on my way to court, and Ms. Susan
7 Estridge has withdrawn her candidacy.
8 THE COURT: Thank you. Is the matter submitted?
9 MR. GROSS: Yes, your Honor.
10 MR. SIEGEL: Yes.
11 THE COURT: Submitted, Mr. Temchine? Submitted?
12 MR. TEMCHINE: I submit, your Honor.
13 THE COURT: Thank you.
14 As a preliminary matter the Court makes no order with
15 regard to the interpretation of the stipulation.
16 With regard to the application to enforce the
17 stipulation and for a temporary restraining order, that
18 application will be granted and the Court will order that
19 Defendant Pacifica Foundation is restrained from conducting
20 a meeting for purposes of adding Directors to Pacifica's
21 Board of Directors except upon 30-days' written notice to
22 the Plaintiffs' counsel, as well as notice in the ordinary
23 course as part of the Board's conducting of meetings.
24 The reason for the Court's order, Mr. Temchine, is
25 that the nature of the emergency that you have described in
26 your pleadings and argued this morning is one that I think
27 is more personal in nature to those Directors who have been
28 adversely affected in this process. But -- and there is
LINDA SKAGGS, CSR # 8253
29
1 substantial dispute about whether or not the conduct that
2 has been visited upon these Directors is in the form of
3 illegal activity or perhaps even in certain instances
4 violative of certain specific statutes, labor laws and the
5 like, perhaps even criminal laws may be implicated in
6 certain instances. Of course, that characterization is
7 hotly disputed by the Plaintiffs and Cross-Defendants in
8 these various proceedings, and they contend this is merely
9 the free exercise of their constitutional rights in certain
10 instances, to express their views publicly on matters of
11 import that are characterized, at least by some of the
12 Plaintiffs, as being political in nature. And indeed they
13 may be in the nature of a political matters in certain
14 particulars.
15 But I do not want to foreclose and that's why I make
16 no orders with regard to the interpretation of the lack of
17 the stipulation. That there may not be at some point in the
18 near future an emergency that would warrant this Court's
19 consideration of special meetings of the Board to address
20 emergencies that are faced by the corporation. But the
21 emergencies that are addressed to the Court this morning are
22 in the nature of personal matters or personal emergencies,
23 as I've suggested, that have been visited upon these
24 Directors who have resigned.
25 And so on that -- that's the basis for the Court's
26 decision. And I am not setting any further hearings for
27 preliminary injunction or the like, and I would expect if
28 there is going to be a meeting to add additional Directors,
LINDA SKAGGS, CSR # 8253
30
1 that a notice would go out and that that meeting would be
2 scheduled in the ordinary course, with at least 30 days
3 written notice as provided in the stipulation. And also as
4 I've said, with compliance with what other notices are
5 required in the bylaws of the corporation.
6 And if there are further proceedings, to address the
7 scheduling of those meetings and the topics that are to be
8 addressed in those meetings, then we're here, and you all
9 know how to get here, and you can bring those matters to the
10 Court's attention.
11 All right. And I think, Mr. Gross, or someone will
12 have to prepare an order and submit it to Mr. Temchine for
13 his approval as to form and content.
14 All right. Thank you.
15 (Whereupon, the proceedings were adjourned.)
16 ---oOo---
LINDA SKAGGS, CSR # 8253
1
2 STATE OF CALIFORNIA )
COUNTY OF ALAMEDA )
3
4
5 I, LINDA SKAGGS, CSR NO. 8253, do hereby certify
6 that I am an Official Court Reporter of the Superior Court
7 of the State of California, and that as such I reported the
8 proceedings had in the above-entitled matter at the time and
9 place set forth herein;
10 That my stenographic notes were thereafter
11 transcribed into typewriting under my direction; and that
12 the forgoing pages numbered 1 through 30 constitutes a full,
13 true and correct transcription of my said notes.
14
15
16 _______________________________
17 LINDA SKAGGS, CSR # 8253
18
19
20
21 DATED: JULY 17, 2001
22
23
24
25
26
27
28
1
2 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
3 IN AND FOR THE COUNTY OF ALAMEDA
4 BEFORE THE HONORABLE RONALD M. SABRAW, JUDGE
5 DEPARTMENT 22
6
7 DAVID ADELSON, et al.,
Plaintiffs,
8 vs. Case No. 814461-0
PACIFICA FOUNDATION, et al., C/W 831252-3 and
9 Defendants. 831286-0
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