PLAINTIFFS’ MEMORANDUM OF POINTS AND AUTHORITIES
IN OPPOSITION TO DEFENDANTS’ MOTION TO DISMISS

Plaintiffs, the People of the State of California, ex rel., Carol Spooner, John D. Biello, Carolyn Birden, Kurt Guerdrum, Arturo Griffifths, Amburn R. Hague, Leigh Hauter, Patricia Heffley, Barbara MacQuiddy, Rick Potthoff, Charles P.H. Scurich, Ronald Swart, individually and on behalf of Pacifica Foundation, oppose moving defendants’ motion to dismiss the action on the grounds that this Court has no subject matter jurisdiction over this case.

I. PLAINTIFFS’ CLAIMS ARE NOT PREEMPTED BY FEDERAL LAW,
AND THIS COURT HAS NO SUBJECT MATTER JURISDICTION IN
THIS CASE.

Plaintiffs fully incorporate herein by this reference their Motion for Remand and their Memorandum of Points and Authorities in Support their Motion for Remand, filed October 26, 2000.

II. DEFENDANTS’ FUNDAMENTALLY MISCONSTRUE THE COMPLAINT.

Moving defendants fundamentally misconstrue the complaint brought against them. They have confounded their obligations as holders of broadcast licenses under the Federal Communications Act – to use those broadcast licenses in the public interest -- with their obligations under the California Nonprofit Corporations Law – to use those broadcast licenses for the purposes set forth in the Articles of Incorporation of the Pacifica Foundation.

The Pacifica Foundation Articles of Incorporation have, since amendments filed with the California Secretary of State on August 20, 1949, stated the purposes of Pacifica, at Article II, as follows:

"That the purpose of this corporation shall be:

(a) To establish a Foundation organized and operated exclusively for educational purposes no part of the net earnings of which inures to the benefit of any member of the Foundation, and no substantial part of the activities of which is designed to carry on propaganda or otherwise attempt to influence legislation.

(b) To establish and operate for educational purposes, in such manner that the facilities involved shall be as nearly self-sustaining as possible, one or more radio broadcasting stations licensed by the Federal Communications Commission and subject in their operation to the regulatory actions of the Commission under the Communications Act of 1934, As Amended.

(c) In radio broadcasting operations to encourage and provide outlets for the creative skills and energies of the community; to conduct classes and workshops in writing and producing of drama; to establish awards and scholarships for creative writing; to offer performance facilities to amateur instrumentalists, choral groups, orchestral groups and music students; and to promote and aid other creative activities which will serve the cultural welfare of the community.

(d) In radio broadcasting operations to engage in any activity that shall contribute to a lasting understanding between nations and between the individuals of all nations, races, creeds and colors; to gather and disseminate information on the causes of conflict between any and all of such groups; and through any and all means compatible with the purposes of this corporation, to promote the study of political and economic problems and the causes of religious, philosophical and racial antagonisms.

(e) In radio broadcasting operations to promote the full distribution of public information; to obtain access to sources of news not commonly brought together in the same medium; and to employ such varied sources in the public presentation of accurate, objective, comprehensive news on all matters vitally affecting the community."

Complaint, Paragraph 18.

The Complaint does not allege that defendants are not using their broadcast licenses in the public interest, and therefore makes no challenge that comes under the jurisdiction of the Federal Communications Commission ("FCC"). Defendants may well meet all of their public interest obligations under the Federal Communications Act and still breach their trust under the California Nonprofit Corporations Law.

Plaintiffs reiterate here that there is nothing in the Public Broadcasting Act that compels Pacifica to apply for or to accept grants from the Corporation for Public Broadcasting if doing so requires a breach of the Pacifica trust or a change in Pacifica’s governance structure or the voting rights of Pacifica’s corporate members. In fact, the purposes set forth in Pacifica’s Articles of Incorporation, and, particularly at section (b), to be as nearly self-sustaining as possible, require rejection of any federal funding that would meddle with Pacifica’s program content and the rights of its members.

For nearly 50 years Pacifica conformed to its trust purposes, and the FCC renewed its broadcast licenses periodically over the years. In fact, Pacifica once was in the forefront of development of First Amendment law with regard to broadcasters under the Federal Communications Act, FCC v. Pacifica Foundation, 438 U.S. 726 (1978) (indecency), and under the Public Broadcasting Act, FCC v. League of Women Voters of California, et al., 468 U.S. 364 (1984) (right of noncommercial educational broadcasters to editorialize). But none of those weighty Constitutional issues are before this Court today.

The issues raised in this case are governed by the California Nonprofit Corporation Law (California Corporations Code §5000, et seq.), the California Uniform Supervision of Trustees for Charitable Purposes Act (California Government Code §12580, et seq.), and the California Unfair Competition Law (California Business & Professions Code §17200, et seq.), and are not preempted by the Federal Communications Act (47 U.S.C. §301, et seq.) or the Public Broadcasting Act (47 U.S.C. §390, et seq.).

Under California law, nonprofit public benefit corporations are deemed to be impressed with a charitable trust by virtue of the express declaration of the corporation’s purposes in its articles of incorporation. Pacific Home v. County of Los Angeles, 41 Cal. 2d 844, 852 (1953). The California Supreme Court established nearly forty years ago, in Holt v College of Osteopathic Physicians & Surgeons, 61 Cal. 2d 750 (1961), that the issue of breach of charitable trust does not turn on whether the public interest is served by the actions of the charitable trustees. The sole issue is: Are the charitable trustees using the assets held in trust for the purposes for which the trust was established?

In Holt, the plaintiffs were three trustees of the College of Osteopathic Physicians & Surgeons ("COPS") and the defendants were the other 23 trustees, the California Attorney General, and COPS, itself, as nominal defendant. The defendant trustees proposed to change the nature of COPS from teaching osteopathic medicine to teaching allopathic medicine. The plaintiff trustees sought to enjoin such action, as well as a declaration of the rights and duties of the parties with regard to COPS. The California Attorney General filed an answer to the complaint asserting as an affirmative defense that:

"The matter of proposed changes in the operation of said College was reviewed by the Attorney General to determine whether such changes would constitute a violation of a charitable trust warranting institution of a suit by this office to remedy the situation. It has been concluded that the changes to be made in the operation of said College would not be detrimental to the public interest and do not warrant legal action by this office to prevent such changes."

61 Cal. 2d at p. 752.

The Holt court held:

"The test applied by the Attorney General in deciding not to take legal action is clearly incorrect, for the assets of COPS as a charitable institution can be used only for the purposes for which they were received in trust. The trust is not fulfilled merely by applying the assets in the public interest."

Id. at p. 755.

Likewise, in the present case, the directors of the Pacifica Foundation may satisfy the FCC that they are using their broadcast licenses in the public interest. That is not the issue. The fact that the current directors now diverge from Pacifica’s express trust purposes without incurring the opprobrium of the FCC is neither here nor there. The trust is not fulfilled merely by applying those licenses in the public interest, they must be used only for the purposes for which they were received in trust. And, so long as the trust purposes do not conflict with the public interest, that is not a matter that concerns the FCC or comes under its jurisdiction.

Finally, the Holt court concluded:

"The purpose of COPS nevertheless is to conduct an osteopathic college, and, if the allegations of the complaint are true, the teaching of allopathic medicine is proper only insofar as is useful in the training of osteopaths. [...] Whether the teaching of allopathic medicine as threatened by defendant trustees will change the teaching emphasis at COPS contrary to the charitable purpose of conducting an osteopathic college presents a question of fact that cannot be decided on demurrer."

Id. at p. 760.

In the present case, whether the decision of the defendant Pacifica officers and directors to bow to political pressure from the Corporation for Public Broadcasting ("CPB") and others, and to alter the content of Pacifica’s programming in order to receive federal funding through the CPB, as alleged in the complaint, has changed the programming emphasis at Pacifica contrary to the purposes set forth in the Articles of Incorporation, particularly --

to encourage and provide outlets for the creative skills and energies of the community ... to engage in any activity that shall contribute to a lasting understanding between nations and between the individuals of all nations, races, creeds and colors; to gather and disseminate information on the causes of conflict between any and all of such groups ... to promote the study of political and economic problems and the causes of religious, philosophical and racial antagonisms ... to promote the full distribution of public information; to obtain access to sources of news not commonly brought together in the same medium; and to employ such varied sources in the public presentation of accurate, objective, comprehensive news on all matters vitally affecting the community --

presents a question of fact that cannot be decided on a motion to dismiss under Rule 12(b)(6), and that may not be decided by this Court which lacks subject matter jurisdiction even to rule on the motion.

III. AS THIS COURT HAS NO SUBJECT MATTER JURISDICTION IN
THIS CASE, THE ISSUES RAISED BY MOVING DEFENDANTS
MUST BE DECIDED BY THE STATE COURT.

Moving defendants’ objections to plaintiffs’ standing as relators, and the remainder of their objections to the Complaint, all are matters of state law. As there is no federal question raised in the Complaint, this Court must leave those issues to the California court to decide.

CONCLUSION.

          For the foregoing reasons, plaintiffs respectfully request this Court to decline to rule on moving defendants’ motion to dismiss and, instead, to remand the case to the state court as prayed for in plaintiffs Motion to Remand (with Costs incurred as a result of the removal) previously filed with the Court.

Date: ______________


                                                                Respectfully submitted,

                                                                                   _____________________________________________                                                                                    DANIEL ROBERT BARTLEY, Attorney for Plaintiffs

                                                                                   The People of the State of California, ex rel.,
                                                                                   Carol Spooner, John D. Biello, Carolyn
                                                                                   Birden, Kurt Guerdrum, Arturo Griffifths,
                                                                                   Amburn R. Hague, Leigh Hauter, Patricia
                                                                                   Heffley, Barbara MacQuiddy, Rick Potthoff,
                                                                                   Charles P.H. Scurich, Ronald Swart,
                                                                                   individually and on behalf of Pacifica
                                                                                   Foundation