6.
At all times material hereto, Corp. C. 5142 was in full force and
effect, and was
binding upon Defendants, and each of them. Such section permits legal
action to enjoin, correct,
obtain damages for, or otherwise remedy a breach of a charitable trust.
Section 5142 grants
standing to: (a) the corporation, or a member in the name of the corporation
pursuant to § 5710;
(b) an officer of the corporation; (c) A director of the corporation;
(d) A person with a rever-
sionary,
contractual, or property interest in the assets subject to such charitable
trust; and (e) The
Attorney General, or any person granted relator status by the Attorney
General.
7.
Each of the Relators, at times pertinent hereto, is, and has been,
a listener-sponsor of
PACIFICA FOUNDATION. Relators bring this action on behalf of the State
of California, as
guarantor of the rights of the public and especially those members of
the public who are listener-
sponsors
of PACIFICA FOUNDATION and have a clear and direct interest in the charitable
purpose of PACIFICA. On information and belief, PACIFICA FOUNDATION
has tens of
thousands of listener-sponsors, roughly 40% of whom reside in the State
of California. By virtue
of their status as both sponsors and listeners, Relators and all other
PACIFICA FOUNDATION
listener-sponsors have cognizable special, beneficial, proprietary and
contractual interests in the
charitable trust run by PACIFICA FOUNDATION's directors. The listener-sponsors
of
PACIFICA FOUNDATION are the intended beneficiaries of the PACIFICA FOUNDATION
charitable trust. The listener-sponsors have a direct and defined interest
in the PACIFICA
charitable trust, distinct from that of the general public, in the enforcement
of the charitable
obligations at issue. Relators constitute listener-sponsors from each
of the five areas of the
Country where PACIFICA owns and operates listener-sponsored radio stations.
Each of Relators
is, and at all times relevant hereto, has been, a listener-sponsor of
PACIFICA FOUNDATION in
such Relator's particular listener area, donating funds for the support
of PACIFICA FOUNDA-
TION.
Each Relator is, and has been, the beneficiary of free-speech broadcasting
by PACIFICA
FOUNDATION stations. Relators are members of the class that the charitable
trust is designed
to benefit.
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RELATORS
8.Lead
Relator CAROL SPOONER is a citizen and resident of Santa Rosa, California,
and is a listener-sponsor of radio station KPFA, Berkeley, California.
Relator JOHN D. BIELLO
is an adult citizen and resident of New York, New York, and is a listener-sponsor
of radio station
WBAI. Relator CAROLYN M. BIRDEN is an adult citizen and resident of
New York, New
York, and is a listener-sponsor of radio station WBAI, New York, New
York. Relator KURT
GUERDRUM is an adult citizen and resident of Spring, Texas, and is a
listener-sponsor of radio
station KPFT, Houston, Texas. Relator ARTURO GRIFFITHS is an adult citizen
and resident of
Washington, D.C., and a listener-sponsor of radio station WPFW, Washington,
D.C. Relator
AMBURN R. HAGUE is an adult citizen and resident of San Francisco, California,
and is a
listener-sponsor of radio station KPFA, Berkeley, California. Relator
LEIGH HAUTER is an
adult citizen and resident of The Plains, Virginia, and is a listener-sponsor
of radio station
WPFW, Washington, D.C. Relator PATRICIA HEFFLEY is an adult citizen
and resident of
New York, New York, and is a listener-sponsor of radio station WBAI,
New York. Relator
BARBARA MacQUIDDY is an adult citizen and resident of Nevada City, California,
and is a
listener-sponsor of radio station KPFA, Berkeley, California. Relator
RICK POTHOFF is an
adult citizen and resident of Houston, Texas, and is a listener-sponsor
of radio station KPFT,
Houston, Texas. Relator CHARLES P. H. SCURICH is an adult citizen and
resident of both
Oakland, California, and San Clemente, California, and is a listener-sponsor
of radio station
KPFA, Berkeley, California, and KPFK, Los Angeles, California. Relator
RONALD SWART is
an adult citizen and resident of Long Beach, California, and is a listener-sponsor
of radio station
KPFK, Los Angeles, California.
DEFENDANTS
9.
At all times herein mentioned, Defendant PACIFICA FOUNDATION ("PACI-
FICA")
was a nonprofit public benefit corporation and charitable trust, organized
and existing
under the laws of the State of California, with offices and operations
located in the City of
Berkeley, Alameda County, California. At all times mentioned herein
until some time in
January, 2000, the Pacifica national headquarters offices were located
at 1929 Martin Luther
King Jr. Way, Berkeley, Alameda County, California.
10.
Defendants DAVID ACOSTA, MARY FRANCES BERRY, ROBERT FARRELL,
KEN FORD, JUNE MAKELA, FRANK MILLSPAUGH, and MICHEAL PALMER, collec-
tively
referred to herein as "EXECUTIVE COMMITTEE", were directors of the Pacifica
Foundation during the spring and summer of 1999, when they secretly
conspired together to
carry out the extraordinary abuses of authority and discretion alleged
herein, leading up to and
including the shutdown of radio station KPFA. All of such directors
continue to serve on the
board of directors and on the EXECUTIVE COMMITTEE of the Board except
defendant JUNE
MAKELA who resigned in February 2000.
11.
Defendants PETE BRAMSON (KPFA), ANDREA CISCO (WBAI), AARON
KRIEGEL (KPFK), and ROB ROBINSON (WPFW) at all times mentioned herein
were and are
directors of the Pacifica Foundation, elected by the local station advisory
boards of the respective
stations they represent.
12.
Defendants WENDELL JOHNS, TOMAS MORAN and KAROLYN van PUTTEN
were purportedly elected as "at large" directors by the board of directors
in October 1999, and
each of them continues to serve as directors of Pacifica Foundation.
13.
Defendants LESLIE CAGAN, VALRIE CHAMBERS, BERTRAM LEE, BETH
LYONS, and JOHN MURDOCK were purportedly elected as "at large" directors
by the board of
directors in February 2000 and each of them continues to serve as directors
of Pacifica Foundation.
14.
Defendant LYNN CHADWICK served as Executive Director of Pacifica Founda-
tion
from 1997 until she resigned in February 2000.
15.
Relators are unaware of the true names and capacities of the Defendants
sued as
Does 1 to 100. Relators will amend their complaint when the true names
and capacities have
been ascertained. Relators are informed and believe, and on that basis
allege, that each Doe
Defendant is responsible in some actionable manner for the events, occurrences,
injuries and
damages alleged herein.
16.
All managerial employees of the Defendants, in doing the acts and
things described
in this complaint, were acting within the course and scope of their
agency and employment with
the Defendants, and each of them, with the knowledge and consent of
the EXECUTIVE COM-
MITTEE
Defendants, and each of them.
17.
Relators are informed and believe, and on that basis allege, that
at all relevant times
each EXECUTIVE COMMITTEE Defendant and defendant Executive Director,
LYNN
CHADWICK, agreed and conspired together to do the acts complained of
herein, and that each
co-conspirator committed the acts alleged herein in furtherance of their
conspiracy.
FACTS
18. The Pacifica Foundation Articles of Incorporation, have, since amendments Filed
August 20, 1949, stated the purposes of Pacifica, at Article II, as follows:
Except
for changing "Board of Directors" to "Governing Board", this bylaw has
remained
unchanged since 1961.
33.
Relators are informed and believe, and on that basis allege, that
Pacifica Foundation
has repeatedly
permitted directors to continue serving past the expiration of their
terms.
Currently, Ken Ford, whose term expired in June 2000, and David Acosta,
whose term expired in
March 1999, are serving as directors and members of the Executive Committee.
34.
Relators are informed and believe, and on that basis allege, that
in January 2000,
without prior notice to staff or the listener community, the Pacifica
national headquarters office
was moved in the dead of night from its historic home in Berkeley to
some undisclosed location
in Washington, D.C. The Pacifica Foundation web page reads as of the
date of filing of this
Complaint: "To contact the Pacifica Foundation National Office, mail
or telephone: Pacifica
Foundation c/o Haley, Bader & Potts, P.O. Box 3825, Arlington, VA
22203-9998, (703)
243-6844." Haley, Bader & Potts is a law firm.
35.
At its meeting in October 1999, the board purported to elect three
new "at large"
directors - TOMAS MORAN, KAROLYN van PUTTEN, and WENDELL JOHNS. These
directors were elected as a group, up or down, and were not elected
individually by a 2/3rds
majority voting by secret ballot as required prior to the unlawful September
1997 bylaws
amendments.
36.
At its meeting in February 2000, the board purported to elect five
additional new
"at large" directors, JOHN MURDOCK, LESLIE CAGAN, BERTRAM LEE, VALRIE
CHAMBERS, AND BETH LYONS. This brings the total number of "at large"
directors to nine,
including the Chair and the three "at large" directors elected in October
of 1999, or four more "at
large" directors than the traditional maximum number of 5 "at large"
directors permitted under
Pacifica policies and procedure since 1984. Again, these directors were
elected as a group, up or
down, and were not elected individually by a 2/3rds majority voting
by secret ballot as required
prior to the unlawful September 1997 bylaws amendments. As a result
of this election, there are
currently 18 directors, three more than the traditional number of 15
allowed under Pacifica
policies and procedures since 1984, and thirteen more than the five
directors specified in the
Articles of Incorporation.
37.
Relators are informed and believe, and on that basis allege, that
at the meeting of
the KPFK LAB in May 2000, pursuant to their rights under California
Corporations Code §
5222, the KPFK LAB members voted to remove director Robert Farrell who
had been originally
elected to the Pacifica Board by them for a three-year term commencing
February 1999. Mr.
Farrell continues to act as a director of the Pacifica Foundation.
38.
Relators are informed and believe, and on that basis allege, that
at the meeting of
the WBAI LAB in May 2000, pursuant to their rights under California
Corporations Code §
5222, the WBAI LAB voted to remove directors Andrea Cisco, who had originally
been
elected
by them for a three-year term commencing in March of 1998, and Frank
Millspaugh, who had
originally been elected by them for a three-year term commencing in
October 1994 and
re-elected by them for a three-year term commencing in March 1998. Ms.
Cisco and Mr.
Millspaugh continue to act as directors of the Pacifica Foundation.
39.
Relators are informed and believe, and on that basis allege, that
at the May 2000
meeting of the KPFK LAB, the members of that LAB nominated and elected
by majority vote
Dawud Kahlil-Ullah as a director of the Pacifica Foundation representing
KPFK. The defendants
have refused to seat him as a director.
40.
Relators are informed and believe, and on that basis allege, that
at the May 2000
meeting of the KPFA LAB, the members of that LAB nominated and elected
by majority vote
\\\
Jay
Imani as a director of the Pacifica Foundation representing KPFA. The
defendants have
refused to seat him as a director.
41.
Relators are informed and believe, and on that basis allege, that
since 1994 there
have been irregularities in Pacifica accounts, including without limit,
unexplained payments for
space not built in the construction of studios for station WPFW and
requiring personnel at WBAI
to sign blank checks.
42.
Relators are informed and believe, and on that basis allege that since
June 1995
defendants have held all board finance committee meetings in secret
and have refused to inform
the public, or even other directors, of the finances of Pacifica.
43.
Defendants' practices relative to the Pacifica Board of Directors
are defective,
because such were made without a modicum of due process. Defendants
have in place no
democratic mechanism giving listener-sponsors a fair and reasonable
opportunity to serve as
voting members. As a consequence, listener-sponsors - the intended beneficiaries
of the
PACIFICA charitable trust - are thereby denied an effective voice in
the process for selection of
PACIFICA
FOUNDATION directors. This denial of an effective role to listener-sponsors
is
inconsistent with the purpose of the PACIFICA charitable trust.
FIRST CAUSE OF ACTION:
BREACH OF CHARITABLE
TRUST
(Against Defendants MARY
FRANCES BERRY, DAVID ACOSTA, ROBERT FARRELL,
KEN FORD, JUNE MAKELA
FRANK MILLSPAUGH, MICHEAL PALMER, LYNN
CHADWICK, and DOES 1-100)
44.. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
45. At all times material hereto, Corp.
C. § 5142 and Govt. C. § 12591, were in full
force and effect, and were binding upon
Defendants, and each of them. Corp. C. § 5142 permits
legal action to enjoin, correct, obtain
damages for, or otherwise remedy, a breach of a charitable
trust. Govt. C. § 12591 require the Attorney
General to supervise the activities of trustees
administering trusts of a charitable
nature, to protect the interests of beneficiaries of a charitable
trust, and to institute suit when the
Attorney General has concluded after investigation that there
has been a breach of a charitable trust
or a departure from the general purposes of which the
corporation was formed. Nonprofit public
benefit corporations are deemed under California law
to be impressed with a charitable trust
to carry out the purposes stated in their Articles of
Incorporation.
46. By virtue of their conduct set forth
above, the EXECUTIVE COMMITTEE
Defendants, MARY FRANCES BERRY, DAVID
ACOSTA, ROBERT FARRELL, KEN
FORD, JUNE MAKELA FRANK MILLSPAUGH, and
MICHEAL PALMER, together with
Defendant LYNN CHADWICK, Executive Director,
have conspired together in bad faith to
engage in, and continue to engage in,
extraordinary violations of the express purposes of the
Pacifica Foundation and the charitable
trust managed by Pacifica Foundation. By virtue of their
conduct set forth above, the EXECUTIVE
COMMITTEE Defendants and LYNN CHADWICK
have acted in a manner contrary to the
best interests of the corporation and lacking such care,
including reasonable inquiry, as an ordinary
prudent person in a like position would use under
similar circumstances. These actions
have perverted, and continue to pervert, the founding
purposes of Pacifica and the charitable
intent of the founders and of the listener-sponsors over the
past 50 years. Further, these actions
threaten the continued long-term viability of the Pacifica
Foundation and the trust. The EXECUTIVE
COMMITTEE defendants and LYNN CHADWICK
have committed a breach of charitable
trust.
47. The breach of charitable trust by
the EXECUTIVE COMMITTEE Defendants and
LYNN CHADWICK, and each of them, has
caused, and continues to cause, significant
irreparable injury to the business and
reputation of PACIFICA FOUNDATION and monetary
damages to the PACIFICA charitable trust
in excess of $500,000, according to proof.
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SECOND CAUSE
OF ACTION
REMOVAL OF DIRECTORS
- GROSS ABUSE OF AUTHORITY AND DISCRETION
(Against Defendants
MARY FRANCES BERRY, DAVID ACOSTA,
ROBERT FARRELL, KEN
FORD, FRANK MILLSPAUGH, and MICHEAL PALMER)
48. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
49. At all times material hereto, Corp.
C. § 5223 was in full force and effect, and was
binding upon Defendants, and each of
them. Such statute permits the Attorney General to
prosecute an action to remove from office
any director in case of gross abuse of authority or
discretion with reference to the corporation,
and to bar from reelection any director so removed
for a period prescribed by the court.
50. By virtue of their above-described
conduct, the EXECUTIVE COMMITTEE
Defendants - MARY FRANCES BERRY, DAVID
ACOSTA, ROBERT FARRELL, KEN
FORD, FRANK MILLSPAUGH, and MICHEAL PALMER
- committed gross abuse of their
authority and discretion. Relators are
informed and believe, and thereon allege, that the
EXECUTIVE COMMITTEE defendants' conduct
will continue if they are allowed to remain
members of the board of directors.
51. The EXECUTIVE COMMITTEE Defendants'
gross abuse of authority and
discretion has caused, and continues
to cause, significant irreparable damage and injury to the
PACIFICA charitable trust and to its
intended beneficiaries, those members of the public who are
listener-sponsors.
THIRD CAUSE OF
ACTION:
REMOVAL OF DIRECTORS
- USURPATION OF OFFICE - REFUSING
TO VACATE OFFICE
AFTER EXPIRATION OF TERM
(Against Defendants
KEN FORD and DAVID ACOSTA)
52. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
53. At all times material hereto, Corp.
C. § 5520 and Code Civ. P. § 803 were in full
force and effect, and were binding upon
Defendants, and each of them. Consistent with Corp. C.
§ 5520, director positions in California
public benefit corporations are supposed to be filled via
"reasonable nomination and election procedures"
available to the members, given the nature,
size, and operation of the corporation.
Consistent with Code Civ. P. § 803, an action must be
brought by the Attorney General, in the
name of the People, upon his own information, or upon a
complaint of a private party, against
any person who usurps, intrudes into, or unlawfully holds or
exercises any public office, civil or
military, or any franchise, or against any corporation, either
de jure or de facto, which usurps, intrudes
into, or unlawfully holds or exercises any franchise
within this state.
54. By virtue of their above-described
conduct, Defendants KEN FORD and DAVID
ACOSTA each usurped, intruded into, and
unlawfully held and exercised his respective Director
office, and continues to do so, by exercising
the power of a director past the date of expiration of
his term Relators are informed and believe,
and thereon allege, that these Defendants' conduct
will continue if they are allowed to
remain members of the board of directors.
55. Defendants' usurpation of office
has caused, and continues to cause, significant and
irreparable damage and injury to the
PACIFICA charitable trust and to its intended beneficiaries,
those members of the public who are listener-sponsors.
FOURTH CAUSE
OF ACTION
REMOVAL OF DIRECTORS
- USURPATION OF OFFICE - UNLAWFUL ELECTION
OF DIRECTORS IN EXCESS
OF THE NUMBER SPECIFIED IN THE ARTICLES OF
INCORPORATION AND IN
VIOLATION OF THE BYLAWS AND POLICIES AND
PROCEDURES OF PACIFICA
FOUNDATION.
(Against Defendants MORAN,
van PUTTEN, JOHNS, CAGAN,
CHAMBERS, LEE, LYONS, and
MURDOCK)
56. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
57. At all times material hereto, Corp.
C. §§ 5151, 5520 and 5527 and Code Civ. P. §
803 were in full force and effect, and
were binding upon Defendants, and each of them. Consis-
tent with Corp. C. § 5520, director positions
in California public benefit corporations are sup-
posed to be filled via "reasonable nomination
and election procedures" available to the members,
given the nature, size, and operation
of the corporation. Corp C. § 5151 requires that bylaws shall
set forth (unless such provision is contained
in the articles) the number of directors of the
corporation; or that the number shall
not be less than a stated minimum nor more than a stated
maximum. Consistent with Code Civ. Proc.
§ 803, an action must be brought by the Attorney
General, in the name of the People, upon
his own information, or upon a complaint of a private
party, against any person who usurps,
intrudes into, or unlawfully holds or exercises any public
office, civil or military, or any franchise,
or against any corporation, either de jure or de facto,
which usurps, intrudes into, or unlawfully
holds or exercises any franchise within this state.
58. By virtue of their above-described
conduct, Defendants TOMAS MORAN,
KAROLYN VAN PUTTEN, WENDELL JOHNS, LESLIE
CAGAN, VALRIE CHAMBERS,
BERTRAM LEE, BETH LYONS, and JOHN MURDOCK
usurped, intruded into, and unlaw-
fully held and exercised his or her respective
office of Director, and continue to do so, by
purportedly being elected in October
1999 or February 2000 as directors when the election was in
violation of the requirement of the Articles
of Incorporation requiring that there shall be five (5)
directors.
59. By virtue of their above-described
conduct, each of the Defendants CAGAN,
CHAMBERS, LEE, LYONS, and MURDOCK usurped,
intruded into, and unlawfully held and
exercised his or her respective office
of Director, and continues to do so, by purportedly being
elected in February 2000 as director
when the election was in violation of bylaws requirements
for election of "at large" directors
by secret ballot, and in violation of Pacifica policies and
procedures limiting the number of directors
to a maximum of fifteen (15) and limiting the
number of "at large" directors to a maximum
of five (5).
60. The purported election of such directors
was in violation of Corp. C. §5520 by
being an election conducted without "reasonable
nomination and election procedures" available
to the members, given the nature, size,
and operation of the corporation; and of Corp C. §5151
being elected for the purpose of packing
the board without a set number of Directors or a stated
minimum and maximum. Relators are informed
and believe and thereon allege that the
Defendants' conduct will continue if
they are allowed to remain members of the board of
directors.
61. Defendants' usurpation of office
has caused, and continues to cause, significant and
irreparable damage and injury to the
PACIFICA charitable trust and to its intended beneficiaries,
those members of the public who are listener-sponsors.
FIFTH CAUSE OF
ACTION
REMOVAL OF DIRECTORS
- USURPATION OF OFFICE -
REFUSAL TO VACATE OFFICE
(Against Defendants
ROBERT FARRELL, ANDREA CISCO, and FRANK MILLSPAUGH)
62. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
63. At all times material hereto, Corp.
C. §§ 5222 and Code Civ. P. § 803 were in full
force and effect, and were binding upon
Defendants, and each of them. Corp C. § 5222
authorizes removal of directors without
cause by majority vote of the class or geographical
grouping of members that elected the
director. Consistent with Code Civ. P. § 803, an action
must be brought by the Attorney General,
in the name of the People, upon his own information,
or upon a complaint of a private party,
against any person who usurps, intrudes into, or
unlawfully holds or exercises any public
office, civil or military, or any franchise, or against any
corporation, either de jure or de facto,
which usurps, intrudes into, or unlawfully holds or
exercises any franchise within this state.
64. By virtue of their above-described
conduct, Defendants ROBERT FARRELL,
ANDREA CISCO, and FRANK MILLSPAUGH usurped,
intruded into, and unlawfully held and
exercised his or her respective Director
office, and continue to do so, by refusing to vacate the
office of director after having been
removed without cause in May 2000 pursuant to Corp C.
§5222 by the local advisory boards that
elected them.. Relators are informed and believe and
thereon allege that the Defendants' conduct
will continue if they are allowed to remain members
of the board of directors.
65. Defendants' usurpation of office has
caused, and continues to cause, significant and
irreparable damage and injury to the
PACIFICA charitable trust and to its intended beneficiaries,
those members of the public who are listener-sponsors.
SIXTH CAUSE OF
ACTION
ACCOUNTING
66. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
67. At all times material hereto, Corp.
C. § 6320(a)(1) was in full force and effect, and
was binding upon Defendants, and each
of them. Such section requires Defendants to keep
adequate and correct books and records
of account.
68. At all times material hereto, Corp
C. § 6336 was in full force and effect, and was
binding upon Defendants, and each of
them. Such section requires Defendants to permit lawful
demands of any member to inspect the
corporation's membership lists, books, records, or
minutes, and permits the Court to appoint
one or more competent inspectors or independent
accounts to audit the corporations's
financial statements, properties, funds, and affairs and to
report on them in the manner the Court
directs. Defendants clearly have applied hundreds of
thousands of dollars in PACIFICA FOUNDATION
funds toward purposes inconsistent with
supporting the free-speech purpose that
is the very purpose of existence of PACIFICA
FOUNDATION. Moreover, Defendants, at
all times pertinent hereto, have concealed from
directors as well as listener-sponsors
specifics about the expenditure of the millions of dollars in
funding provided by the listener-sponsors.
69. As a proximate result of such conduct
by Defendants, and each of them, the People
of the State of California, and the PACIFICA
charitable trust's listener-sponsors in particular,
have sustained, and continue to sustain,
serious and irreparable injury and damage. Declaratory
relief is justified, in the nature of
compelling Defendants to submit to a full accounting of their
use and disposition of funds from January
1, 1994, to present, or such other period as the Court
finds is reasonable, and to compel Defendants
to henceforth promptly make available their books
and records to reasonable requests therefor
by directors, members and listener-sponsors.
SEVENTH CAUSE
OF ACTION
DECLARATORY RELIEF COMPELLING
ADOPTION OF
BYLAWS IN CONFORMITY
WITH LAW AND IMPLEMENTATION
OF A FAIR, REASONABLE,
AND CONSISTENT MECHANISM FOR
DEFINING AND DEMOCRATICALLY
SELECTING VOTING MEMBERS
70. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
71. At all times material hereto, Corp.
C. §§ 5036, 5132 and 5520 were in full force and
effect, and were binding upon Defendants,
and each of them. Consistent with Corp. C. § 5520,
director positions in California public
benefit corporations are supposed to be filled via
"reasonable nomination and election procedures"
available to the members, given the nature,
size, and operation of the corporation.
Consistent with Corp C. §5036 "member" means any
person who pursuant to a specific provision
of a corporation's articles or bylaws, has the right to
vote for the election of a director or
directors, and "member" also means any person who is
designated in the articles or bylaws
as a member and, pursuant to a specific provision of a
corporation's articles or bylaws, has
the right to vote on changes to the articles or bylaws.
Consistent with Corp. C. § 5132, the
articles of incorporation may set forth classes of
membership or any other provision not
in conflict with law including any provision which is
required or permitted to be stated in
the bylaws. The duly adopted 1984 bylaws of PACIFICA
FOUNDATION gave to the local advisory
boards the specific right to vote for directors thereby
making the local advisory board members
statutory members of the corporation pursuant to Corp
C. § 5036. In addition, the Articles
of Incorporation in Article VI establish a specific provision
\\\
that delegates to the "members" of the
corporation the right to vote on changes to the number of
"directors" of the corporation thus establishing
a class of members separate from the directors..
72. By virtue of their above-described
actions, Defendants have failed, and fail, to
establish or maintain a fair, reasonable,
and consistent mechanism for defining the members of
the corporation, as distinct form the
directors of the corporation, and for democratically selecting
voting members, with a modicum of due
process.
73. PACIFICA FOUNDATION's current membership
selection procedures for the
statutory members (consisting of the
local advisory board members) are fundamentally unfair,
because they give listener-sponsors no
voice in the selection of such members or the nomination
or election of directors, considering
the significant nature, size and operations of the corporation.
74. The absence of a fair, reasonable,
and consistent mechanism for the defining and
selecting voting members who have the
right to elect directors and to change the number of
directors has constituted, and continues
to constitute, a violation of Corp. C. § 5036, 5132,.and
5520..
75. As a proximate result of such conduct
by Defendants, and each of them, the People
of the State of California, and the PACIFICA
charitable trust's listener-sponsors in particular,
have sustained, and continue to sustain,
serious and irreparable injury and damage. Declaratory
relief is justified, in the nature of
compelling Defendants to adopt a fair, reasonable, and
consistent mechanism for defining and
democratically selecting voting members of the
PACIFICA. FOUNDATION.
EIGHTH CAUSE
OF ACTION
DECLARATORY RELIEF COMPELLING
ADOPTION OF BYLAWS IN
CONFORMITY WITH LAW
AND IMPLEMENTATION OF A FAIR, REASONABLE,
AND CONSISTENT MECHANISM
FOR SETTING FORTH THE NUMBER
OF
DIRECTORS OF THE CORPORATION,
OR THAT THE NUMBER OF DIRECTORS
SHALL BE NOT LESS THAN
A STATED MINIMUM NOR MORE
THAN A STATED MAXIMUM.
76. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
77. At all times material hereto, Corp.
C. § 5151(a) was in full force and effect, and was
binding upon Defendants, and each of
them. Consistent with such statute, the Bylaws of a
California public benefit corporation
are supposed to set forth the number of directors of the
corporation (unless such provision is
contained in the articles, in which case it may only be
changed by an amendment of the articles),
or that the number of directors shall not be less than a
stated minimum nor more than a stated
maximum. Article VI of the Articles of Incorporation
state, in relevant part, "That the number
of directors of this corporation . . . shall be five (5) . . .
That special authority is hereby delegated
to the members of this corporation to change the
number of directors thereof at any time
by the adoption of a By-law to that effect." Additionally,
Corp C. § 5151(b) requires that once
members have been admitted any change in the fixed
number of directors or the maximum or
minimum number or changing from a fixed to a variable
board or vice versa may only be adopted
by approval of the members. Article VI of the Pacifica
Articles of Incorporation, providing
for a change in the number of directors to be made by a vote
of the members by the adoption of a bylaw,
appears to conflict with Corp C. § 5151(a) which
requires amendment to the articles of
incorporation in order to change the fixed number of
directors. Changes in the number of directors
have never been voted on by members of the
corporation either as an amendment to
the Articles or to the bylaws. The bylaws do not state a
fixed number of directors nor do they
state a minimum and maximum of director and thus do not
comply with Corp. C. § 5151(a). The Articles
state a fixed number of five (5) directors, and the
Defendants are not in compliance with
the Articles of Incorporation. The Defendants have and
continue to expand the number of directors
by packing the board with persons who have no
demonstrated experience or commitment
to the purposes of the PACIFICA FOUNDATION, and
instead have demonstrated past experience
in organizations and business that are antithetical to
those purposes.
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78. By virtue of their above-described
actions, Defendants have failed, and continue to
fail, to establish or maintain a fair,
reasonable, and consistent mechanism for setting forth the
number of directors other than five directors.
79. As a proximate result of such conduct
by Defendants, and each of them, the People
of the State of California, and the PACIFICA
charitable trust's listener-sponsors in particular,
have sustained, and continue to sustain,
serious and irreparable injury and damage. Declaratory
relief is justified, in the nature of
the Court resolving the apparent contradiction between Article
VI and Corp C. 1 5151(a) and declaring
whether the legal number of directors is five (5) or
another number or by compelling Defendants
to adopt a fair, reasonable, and consistent
mechanism for setting the number of directors
(including defining and democratically selecting
the members who have the right to vote
on the number of directors).
NINTH CAUSE OF
ACTION
DECLARATORY RELIEF COMPELLING
ADOPTION OF BYLAWS IN
CONFORMITY WITH LAW
AND IMPLEMENTATION OF A FAIR, REASONABLE,
AND CONSISTENT MECHANISM
FOR DEFINING AND DEMOCRATICALLY
NOMINATING AND ELECTING
DIRECTORS
80. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
81. At all times material hereto, Corp.
C. § 5520 was in full force and effect, and was
binding upon Defendants, and each of
them. Consistent with such statute, director positions in
California public benefit corporations
are supposed to be filled via "reasonable nomination and
election procedures" available to the
members, given the nature, size, and operation of the
corporation. In addition, at all times
material hereto, Corp. C. § 5036 was in full force and effect,
and was binding upon Defendants, and
each of them. Consistent with such statute "member"
means any person who, pursuant to a specific
provision of a corporation's articles or bylaws, has
the right to vote for the election of
a director or directors. In 1984 a bylaw was adopted that gave
the members of the local advisory boards
the right to vote for the election of directors. The
members of the local advisory board have
never adopted a change or amendment to that
provision. The Defendants, without seeking
vote of approval of the statutory corporate members,
purported to adopt by their own exclusive
vote an amendment to the bylaws that takes away the
rights of the local advisory board members
to nominate and elect the directors from their station
areas.
82. By virtue of their above-described
actions, Defendants have failed, and fail, to
establish or maintain a fair, reasonable,
and consistent mechanism for defining and demo-
cratically nominating and electing a finite
number of directors, given the huge size of the corpor-
ation. PACIFICA FOUNDATION's current membership
selection procedures and director
election procedures are fundamentally
unfair, because they give listener-sponsors no voice in the
nomination or election of directors,
considering the significant nature, size and operations of the
corporation.
83. The absence of a fair, reasonable,
and consistent mechanism for the defining and
selecting of voting members and for the
nominating and electing directors has constituted, and
continues to constitute, a violation
of Corp. C. § 5520, 5151..
84. As a proximate result of such conduct
by Defendants, and each of them, the People
of the State of California, and the PACIFICA
charitable trust's listener-sponsors in particular,
have sustained, and continue to sustain,
serious and irreparable injury and damage. Declaratory
relief is justified, in the nature of
a declaration of the rights of the local advisory board members
to nominate and elect directors pursuant
to the bylaws and compelling Defendants to adopt in
conjunction with the local advisory board
members and any other defined members as the Court
may declare, a fair, reasonable, and
consistent mechanism for defining and democratically
selecting voting members and for democratically
nominating and electing a finite number of
directors, consistent with the substantial
nature, size, and operations of PACIFICA.
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TENTH CAUSE OF
ACTION
UNFAIR COMPETITION
(Against Defendants BERRY,
ACOSTA, FARRELL, FORD, MAKELA,
MILLSPAUGH, PALMER, CHADWICK,
and DOES 1-100)
85. The allegations of the above paragraphs
1 through 43 are incorporated herein by
this reference.
86. At all times material hereto, the
Unfair Competition Law, Bus. & Prof. Code §
17200, was in full force and effect and
was binding upon Defendants, and each of them..
"Unfair competition" means "any unlawful
unfair or fraudulent business act or practice . . . ."
A business practice constitutes unfair
competition if it is forbidden by any law, be it civil or
criminal, federal, state, or municipal,
statutory, regulatory, or court-made, or if it is unfair,
that is, if it offends an established
public policy or is immoral, unethical, oppressive, unscru-
pulous or substantially injurious to consumers.
87. By virtue of their above-described
conduct, Defendants engaged in unfair
competition, in violation of the Unfair
Competition Law. Defendants' above-described conduct
is forbidden by law or is unfair, i.e.,
offensive to established public policy, immoral, unethical,
oppressive, unscrupulous, and substantially
injurious to consumers.
88. Defendants' unfair competition has
caused, and continues to cause, significant and
irreparable damage and injury to the
PACIFICA charitable trust and to its intended beneficiaries,
the general public, especially those
members of the public who are listener-sponsors
.
PRAYER FOR RELIEF
WHEREFORE, the following relief is requested:
1. Judgment requiring immediate removal
of the EXECUTIVE COMMITTEE
Defendants BERRY, ACOSTA, FARRELL, FORD,
MILLSPAUGH, and PALMER as directors
of Pacifica Foundation for their breach
of charitable trust , and prohibiting Defendants, and each
of them, from running for or occupying
any PACIFICA FOUNDATION director position for a
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period of six (6) years, or such other
reasonable period of time as may be determined by the
Attorney General and the Court.
2. Judgment requiring immediate removal
of the EXECUTIVE COMMITTEE
Defendants BERRY, ACOSTA, FARRELL, FORD,
MILLSPAUGH and PALMER for gross
abuse of authority and discretion , and
prohibiting Defendants, and each of them, from running
for or occupying any PACIFICA FOUNDATION
director position for a period of six (6) years,
or such other reasonable period of time
as may be determined by the Attorney General and the
Court.
3. Judgment requiring immediate removal
of Defendants KEN FORD and DAVID
ACOSTA as directors due to expiration
of their terms.
4. Judgment requiring immediate removal
of Defendants MORAN, VAN PUTTEN,
JOHNS, CAGAN, CHAMBERS, LEE, LYONS, and
MURDOCK and declaring their elections
invalid for exceeding the number of directors
authorized by the Articles of Incorporation, and in
violation of the bylaws elections procedures,
and/or in excess of the authorized number of "at
large" directors.
5. Judgment requiring immediate removal
Defendants FARRELL, CISCO, and
MILLSPAUGH and a declaration that each
of them was validly removed without cause by their
respective local station advisory board
electors in May 2000 .
6. Judgment requiring a Bylaws amendment
establishing a fair, reasonable, and
democratic mechanism for the definition
and selection of a body of voting members, consistent
with a modicum of due process, and ensuring
listener-sponsors a voice in the management of the
PACIFICA charitable trust;
7. Judgment declaring the number of
directors or requiring the exercise of special
authority pursuant to the Articles of
Incorporation by the members of the corporation to set the
number of directors.
8. Judgment requiring a Bylaws amendment
establishing a fair, reasonable, and
democratic mechanism for PACIFICA's members
to democratically nominate and elect a finite
number, or a stated maximum and minimum
number, of directors, of PACIFICA;
9. Judgment requiring a full accounting
of Pacifica funds since January 1, 1994, or such
other period as the Court finds reasonable
and appropriate, for the purpose of ensuring that such
funds have been spent in a manner consistent
with the purpose of PACIFICA'S charitable trust,
and requiring Defendants to henceforth
promptly respond to listener-sponsors' reasonable
requests for such data;
10. Judgment requiring cessation of
Defendants' expenditures of listener-sponsors'
funds on pursuits inconsistent with the
objectives of listener-sponsored free-speech radio;
11. Judgment requiring nomination and
election of directors by the newly constituted
voting members;
12. Judgment appointing interim provisional
directors (e.g., a retired judge, a CPA, a
long-time listener-sponsor, and a charitable
trusts consultant) to assist the existing directors in
the expeditious implementation of each
of the above measures.
13. Judgment requiring the provisional
directors, within ninety (90) days of judgment
entry, to conduct a public meeting in
each of the PACIFICA FOUNDATION station areas for the
purpose of receiving recommendations
on Bylaws amendments establishing a fair, reasonable,
and consistent mechanism for defining
and selecting voting members and for those members to,
in turn, democratically nominate and
select directors;
14. Judgment requiring the provisional
directors, within one hundred twenty (120) days
of judgment entry, to recommend to the
Court one or more recommended Bylaws drafts
establishing a fair, reasonable, and
consistent mechanism for defining and selecting voting
members, consistent with due process
principles, and for those members to democratically
nominate and select directors;
15. Judgment requiring the provisional
directors, within one hundred eighty (180) days
of judgment entry, to conduct a new election
of directors, consistent with the new Bylaws;
16. Judgment, upon the election of new
directors, determining that each of the
individual Defendants is no longer entitled
to hold or exercise the office of Director of
PACIFICA FOUNDATION, ordering Defendants
at that time still in office to yield their offices
to the fairly elected director;
17. Judgment awarding damages according
to proof in favor of the Pacifica Foundation
and against defendants BERRY, ACOSTA,
FARRELL, FORD, MAKELA, MILLSPAUGH,
PALMER, CHADWICK, and DOES 1 through
100, jointly and severally, for breach of
charitable trust;
18. Judgment awarding Relators costs
of suit and reasonable expenses necessarily
incurred in the investigation and prosecution
of this action, including, but not limited to, auditor
fees, consultant fees, expert fees, and
attorney fees, pursuant to Code Civ. P. § 1021.5 and any
other applicable law;
19. Judgment for such other and further
relief as the Court may deem proper.
Dated: September 15, 2000 BILL LOCKYER, ATTORNEY GENERAL
STATE OF CALIFORNIA
BARTLEY LAW OFFICES
ATTORNEY FOR RELATORS
_____________________________________
By: Daniel Robert Bartley
VERIFICATION
STATE OF CALIFORNIA
COUNTY OF SONOMA
I, CAROL SPOONER, under penalty of perjury,
under the laws of the State of
California, hereby declare:
I am the lead Relator in this action.
I have read the foregoing VERIFIED COM-
PLAINT, and know its contents.
I declare that the matters stated therein
are true of my own personal knowledge except
as to those matters which are stated on
information and belief, and as to those matters I believe
them to be true; and that I am willing
and competent to testify to such matters if called upon to
do so.
EXECUTED this 15th day of September,
2000, in Santa Rosa, Sonoma County,
California.
__________________________
CAROL SPOONER