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What follows is the transcript of the Alameda County Superior Court porceedings of July 17, 2001 wherein the opposition was denied the opportunity to stack the Board. In it, Amy Goodman is falsely accused of leading a protest in Maine when she was actually in NYC.

"You have a group of people who want to go on with their lives but cannot do so because all of the issues in this case will, in effect, be decided by...the street, not by the Court."
- Daly Temchine, attorney from Epstein, Becker & Green

"Basically, this is a kangaroo election."
- Terry Gross, attorney for the Listener Lawsuit


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 5 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 7 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 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 9 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 11 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 LINDA SKAGGS, CSR # 8253 12 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 13 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 14 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 LINDA SKAGGS, CSR # 8253 15 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 LINDA SKAGGS, CSR # 8253 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 LINDA SKAGGS, CSR # 8253 17 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 18 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 more of the nature of a personal one insofar as the 22 Directors who are pressured? 23 MR. TEMCHINE: Yes and no, your Honor. Let me 24 explain what I mean by that. Obviously, they have an 25 emergency in that they are being put to a choice. They can 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--- 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 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 __________________________________/ 10 AND ALL CROSS-ACTIONS. __________________________________/ 11 REPORTER'S TRANSCRIPT OF PROCEEDINGS 12 COUNTY ADMINISTRATION BUILDING JULY 17, 2001 13 14 APPEARANCES: Research Attorney: PHILIP OBBARD 15 Attorney at Law For the Plaintiffs: 16 State of California and TERRY GROSS Carol Spooner: Attorney at Law 17 ADAM C. BELSKY Attorney at Law 18 David Adelson: HUNTER PYLE 19 Attorney at Law DAN SIEGEL 20 Attorney at Law 21 Robert Robinson and KENNETH N. FRUCHT Aaron Kriegel Attorney at Law 22 For the Defendants: 23 Pacifica Foundation: THIELE R. DUNAWAY Attorney at Law 24 DALY D.E. TEMCHINE Attorney at Law 25 Tomas Moran, Peter Bramson TIMOTHY J. FOX 26 and Leslie Cagan: Attorney at Law EUGENE MAJESKI 27 28 Reported by: Linda Skaggs, CSR 8253