Spooner motion to Enforce Settlement Agreement
7-8-03 Hearing document index
6-19-03 bylaws drafts
From: Carol Spooner
[Filed in Alameda County Superior court yesterday andserved on all directors and parties to the underlyinglawsuits pursuant to the terms of the SettlementAgreement.]
SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ALAMEDA
DAVID ADELSON, et al.,Plaintiffs,
PACIFICA FOUNDATION, et al.,Defendants.
Consolidated Case No.: 814461-0
[Consolidated cases: No. 814461-0,
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF CAROL SPOONER'S MOTION TO ENFORCE SETTLEMENT AGREEMENT PURSUANT TO CCP § 664.6
Carol Spooner, Pacifica Foundation Interim Director, presents the following Points and Authorities in support of her motion to enforce the Settlement Agreement of the underlying actions.
Neither the board Chair nor the Pacifica board of directors has the right to change the voting requirements of the Settlement Agreement for passage of bylaws. The 2/3rds vote of the directors present and voting to adopt "Draft B" of the bylaws should be enforced by the Court.
STATEMENT OF FACTS
The Settlement Agreement further provides that during the term of the Interim Board: "Amendments to bylaws, to be adopted, must receive the vote of two-thirds of all the members of the Interim Board present and voting." (Emphasis added.) [Spooner Declaration, Exhibit A, Settlement Agreement, at Paragraph 3.i.(1).]
At a special telephone conference meeting of the Interim Board on June 26, 2003, "Draft B" of proposed bylaws received the vote of 2/3rds of the directors present and voting - 7 out of 10 votes cast, with three abstentions. [Spooner Declaration, Exhibit G, Minutes of 6/26/03 Meeting.] Three directors present said "None," but as that was not a choice available under the proposition as presented, and their "votes" were properly ruled by the Chair to be abstentions.
ARGUMENT I. THE SETTLEMENT AGREEMENT PROVISION THAT BYLAWS ARE TO BE ADOPTED BY THE VOTE OF TWO THIRDS OF THE DIRECTORS PRESENT AND VOTING SHOULD BE ENFORCED.
California law strongly favors settlement agreements. See, e.g., Huens v. Tatum, 52 Cal. App. 4th 259, 265 (1997); Skulnick v. Roberts Express, Inc., 2 Cal. App. 4th 884, 891 (1992). "Absent a fundamental defect in the agreement itself, the terms are binding on the parties." A.J. Industries, Inc. v. Ver Halen,75 Cal. App. 3d 751, 759 (1977).
Here, the parties agreed that bylaws amendments adopted by the Interim Board would require the vote of approval of 2/3rds of the interim directors present and voting, not the higher requirement of 2/3rds of all those present. The Pacifica Foundation and the Interim Board members are bound by that agreement, and the agreement should be enforced.
II. ROBERT'S RULES OF ORDER CONTROL THE COUNTING OF THE VOTES
"A two thirds vote - when the term is unqualified - means at least two thirds of the votes cast by persons legally entitled to vote, excluding blanks or abstentions, at a regular or properly called meeting at which a quorum is present." (Emphasis added.)On page 389, §44 goes on to discuss "Modifications of Usual Bases for Decisions" as follows:
"Two elements enter into the definition of such bases for decision: (1) the proportion that must concur - a majority, two thirds, three fourths, etc.; and (2) the set of members to which the proportion applies - which (a) when not stated is always the number of members present and voting (assuming there are no illegal voters), but (b) can be specified by rule as the number of members present, the total membership, or some other grouping." (Emphasis in original.)Section 44 continues with an illustration of these different sets of members, on page 389:
"Assume, for example, that at a meeting of a society with a total membership of 150 and a quorum of 10, there are 30 members present, of whom 25 participate in a given counted vote (taken by rising, by show of hands, by roll call, or by ballot). Then, with respect to that vote: [...] A two-thirds vote is 17; A vote of two thirds of the members present is 20; A vote of two thirds of the entire membership is 100."Likewise, in the present instance -- where there are 15 interim directors, 13 members were present, and 10 members voted (excluding abstentions) -- a two-thirds vote is 7, a vote of two thirds of the members present is 9, and a vote of two thirds of the entire membership is 10.
It is contrary to the plain meaning of the Settlement Agreement - requiring approval of bylaws by "two-thirds of all the members of the Interim Board present and voting" (the "basic" requirement for a 2/3rds vote) - to require the higher level of approval of 2/3rds of all those present, including those not voting. However, that is what the Chair did by reading the language "present and voting" to mean merely "present," and then including the three abstentions among those "present and voting."
III. "NONE" IS NOT A VOTE IN A MULTIPLE CHOICE PROPOSITION WHERE "NONE" IS NOT ONE OF THE OPTIONS PRESENTED.
This is not a "technicality" to be overlooked by the Court. The board members discussed the voting method for about 45 minutes before the vote was taken. At one point James Ferguson asked Carol Spooner, "Say it again, Carol, how you want it, please," to which Spooner replied, "We'll take a vote that says A, B, or C. You vote for one of them ..." Ferguson said, "Okay," and Spooner continued, "... your first choice. If none of them gets two-thirds, then we have debate or discussion again, and then we vote again. And if none has two-thirds, and we keep doing it again until we either get two-thirds or we give up." Ferguson responded, " Okay. Yes. Yes." Brooks Declaration, Exhibit A, Transcript, page 6, lines 10-17. Any of the three Directors who may have wanted to vote "None of the Above" could have presented an amendment motion that the multiple choice proposition include a fourth option of voting for "None of the Above." But none of them proposed this fourth option, and the vote was taken on the three options presented: "Draft A, Draft B or Draft C." It is common knowledge to all who regularly vote in local and national elections that, if your ballot doesn't have a "None of the Above" box, you cannot cast a vote for "None of the Above."
While the parliamentarian assisting the Chair at the meeting appeared to be confused by this voting method (Brooks Declaration, Exhibit A, Transcript, pages 17:28-19:1), Robert's Rules of Order (10th Edition), at §45, Voting Procedure, in its discussion of "Preferential Voting" refers to this method of voting as the "normal procedure" where there are more than two possible choices:
"Preferential Voting. The term preferential voting refers to any of a number of voting methods by which, on a single ballot where there are more than two possible choices, the second or less-preferred choices of voters can be taken into account if no candidate or proposition attains a majority. While it is more complicated than other methods and is not a substitute for the normal procedure of repeated balloting until a majority is obtained, preferential voting is especially useful and fair in an election by mail if it is impractical to take more than one ballot." RONR (10th ed.), p. 411, l. 17-29.IV. ADOPTION OF BYLAWS DRAFTS "A" OR "C" WOULD PLACE PACIFICA IN JEOPARDY OF MULTIPLE LAWSUITS IN MULTIPLE JURISDICTIONS FOR RACIAL DISCRIMINATION IN THE RIGHTS OF OUR MEMBERS
"Draft A" requires post-election additions of members to the local and national boards in order to reflect the station signal area demographics - i.e., the percentages of persons living in the area of African American, Latino/Hispanic, Asian, Native American, or other ethnicity or national origin that has been "historically underrepresented or currently discriminated against." If there was ever any real doubt that this procedure would be constitutionally impermissible, that doubt has been resolved by the recent U.S. Supreme Court case Grutter v. Bollinger, 539 U.S. ___ (2003).
Justice O'Connor, for the Court five Justice majority, wrote in Grutter:
"To be narrowly tailored, a race-conscious admissions system cannot use a quota system - it cannot `insulate each category of applicants with certain desired qualifications from competition with all other applicants.' Bakke, at p. 315 (opinion of Powell, J.). Instead, a university may consider race or ethnicity only as a `plus in a particular applicant's file,' without insulat[ing] the individual from comparison with all other candidates for the available seats.' Id., at 317."
"[...] As Justice Powell made clear in Bakke, truly individualized consideration demands that race be used in a flexible nonmechanical way. It follows from this mandate that universities cannot establish quotas for members of certain racial groups or put members of those groups on separate admissions tracks." Grutter v. Bollinger, 539 U.S., supra, slip opinion at page 22.Unfortunately, insulating individual candidates for election from comparison with all other candidates for the available seats and "mechanically" adding them in order to match demographic percentages is precisely what "Draft A" of the proposed Pacifica bylaws does.
While "Draft C" does not contain provisions to add any post-election members to the Local Station Boards, both "Drafts A and C" require station staff to reflect signal area demographics. Such requirements, if carried out to the letter as required by the bylaws, would constitute prohibited racial discrimination in employment practices. [Spooner Declaration, Exhibit F, Draft Comparison Grid, Drafts A and C, Article Eight, Section 4.]
As a recipient of federal funds through the Corporation for Public Broadcasting (roughly $1.2 million per year) as well as substantial federal grants for broadcast tower repairs and upgrades, Pacifica is subject to these Constitutional restrictions. Title VI of the Federal Civil Rights Act of 1964 prohibits "any recipient" of federal funds from discrimination on the basis of race, and Title VII prohibits racial discrimination in hiring. In addition, under the California Unruh Civil Rights Act (Civil Code §51), Pacifica is prohibited from discriminating on the basis or race among our members.
"All persons with the jurisdiction of this state are free and equal, an no matter what their sex, race, color, religion, ancestry, national origin, disability, or medical condition are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever." California Civil Code section 51(b)". Civil Code §51(b).The Unruh Civil Rights Act has been held to apply to private non-profit organizations such as Pacifica. See, e.g., Harris v. Mothers Against Drunk Driving (1995) 40 Cal.App.4th 16, 20; Rotary Club of Duarte v. Board of Directors (1986) 178 Cal.App.3d 1035.
Pacifica will have members across the United States where its radio and internet broadcasts are heard, as well as employees in at least five jurisdictions California (Alameda County and Los Angeles County), Texas, New York, and Washington, D.C. - with rights to equal protection of the laws. Adoption of "Draft A" or "Draft C" of the proposed bylaws would expose Pacifica to a hydra-headed monster of lawsuits -- lawsuits Pacifica can ill-afford to defend in its current vulnerable financial state. "Draft B" of the proposed bylaws is the only draft that avoids these risks.
V. ADOPTION OF DRAFT "A" OR "C" OF THE PROPOSED BYLAWS WOULD BE A BREACH OF THE DIRECTORS' DUTIES OF CARE AND GOOD FAITH.
Adoption of "Draft A" or "Draft C" would be a breach of the directors' duties of care and good faith under California Corporations Code §5231, which provides, in pertinent part, as follows:
"(a) A director shall perform the duties of a director, including duties as a member of any committee of the board upon which the director may serve, in good faith, in a manner such director believes to be in the best interests of the corporation and with such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances."Every lawyer who has advised the board, including the lawyer who advised the Diversity Language Committee, has said that Pacifica can expect lawsuits if percentage diversity requirements are included in the election of Delegates and Directors. [ Spooner Declaration, Paragraphs 8, 11, 12 and 17, Exhibits C and D.] No director could credibly claim to have met the above standard of conduct under these circumstances.
VI. INTERIM DIRECTORS FERGUSON AND LEE ARE ACTING IN BAD FAITH AND ARE IN BREACH OF THE SETTLEMENT AGREEMENT BY OBSTRUCTING ADOPTION OF BYLAWS
The Settlement Agreement provides, at Paragraph 10:
"Further Assurances. The parties agree to perform in good faith such acts and to prepare and execute such documents and stipulations as are reasonably required to perform the covenants and satisfy the provisions of this Agreement."Directors Ferguson and Lee, as signatories to the Settlement Agreement, are required to act in good faith to adopt bylaws in a timely manner. The Settlement Agreement required the passage of bylaws and the election of new local boards to have been completed by the end of last December (twelve months after the first meeting of the Interim Board on December 29, 2001), and the election and seating of a new board of directors by the end of last March (three months after the election of the local boards). Last December, the Court granted the interim board a three-month extension. The elections were to have been completed and a new board of directors seated by June 30th.
At the time the extension was granted, the board was scheduled to vote to adopt proposed bylaws on January 31, 2003. That vote was postponed six times - first to February 7th, then to March 7th, then to April 9th, then to April 18th, then to May 20th, and finally to June 26th. [Spooner Declaration, Paragraphs 9-19.]
Throughout that period, Directors Ferguson and Lee had every opportunity to raise objections or make proposals concerning the proposed bylaws drafts. Director Lee did participate in the work of the "Diversity Language Committee" that developed "Draft A." Yet, when it finally came time to vote, both Ferguson and Lee refused to vote for any of the three proposed draft bylaws. [Fertig Declaration; Spooner Declaration, Paragraphs 22.]
Indeed, for these two directors, throughout the 15-month long bylaws development project, to fail to voice any objections, or to make any proposals they were willing to vote for, does not meet the minimum requirements of good faith. Their actions can only be viewed as deliberate obstruction and bad faith in their duty and obligation to vote to adopt bylaws.
VII. CONTINUED DELAY IN ADOPTION OF BYLAWS IS DAMAGING THE PACIFICA FOUNDATION
The longer this controversy continues, and the longer this Interim Board remains in office, the more damage the Pacifica Foundation suffers as a result of dysfunctional governance.
Since this Interim Board was formed 18 months ago, factionalization on the board has prevented the board from effectively dealing with many serious issues facing Pacifica: fiscal management and budgeting, accounting issues and serious problems with the FYE 9/30/02 audit, personnel matters, licensing issues, programming issues, contractual issues, litigation issues - all are suffering from board dysfunction and lack of coherent direction. [Spooner Declaration, Paragraph 27.]
Rancor and hostility on the board around these bylaws, and other issues, have demoralized management and staff members around the network. The board divisions are interfering with day-to-day management, operations and programming decisions, staff morale, and the ability to prioritize and plan for the future. Pacifica needs a new national board and new local board elections as quickly as possible to bring stability and accountability into Pacifica's governance, and to lead us out of this morass. [Spooner Declaration, Paragraph 28.]
VIII. THE INTERIM BOARD MUST ADOPT BYLAWS NOW IN ORDER FOR A NEW BOARD TO BE SEATED BY JANUARY 2004.
Bylaws must be adopted now in order to complete these elections by the end of this year. Under all the proposed bylaws drafts, Delegate nominations open July 25th and close on September 25th (Drafts A and C permit extension of the nominations period up to 4 weeks to achieve diversity goals in the candidate pool), roughly 100,000 ballots must be printed and mailed to the members on October 10th and must be returned by November 10th, the ballots must be counted and the local boards must be seated in December and must elect their national board directors in time for the annual board meeting in January. [Spooner Declaration, Exhibit E, "Draft B" Bylaws.] This elections schedule cannot be met without drastically reducing the nominations period (which no one wants to do, and many believe should be longer) unless the national board adopts bylaws immediately and three LABs approve them before July 25th. Three LABs - KPFA, KPFK and KPFT - have already voted to approve "Draft B." [Spooner Declaration, Paragraph 21.] It is irresponsible and damaging to the Pacifica Foundation for the board to cause further delays by failing to adopt "Draft B."
Moving party respectfully requests this Court to enter an Order enforcing the Settlement Agreement, and directing the Foundation Secretary to record in the Minutes of the June 26, 2003 special board meeting that the Interim Board of Directors approved "Draft B" of the proposed Bylaws by two-thirds majority vote of 7 out of 10 members present and voting, with Ferguson, Lee and Zakiya abstaining; and further directing the Foundation Secretary to forward "Draft B" of the bylaws to the Chairs of the five Local Advisory Boards requesting the formal vote of approval on "Draft B" (as to those portions concerning the number and manner of election of local and national boards); and that "Draft B" shall be the Pacifica Foundation Bylaws upon the required approval by majority vote of at least three of the five Local Advisory Boards, pursuant to Paragraph 3.b of the Settlement Agreement.
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