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.
\\\
\\\
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.
\\\
\\\
\\\
\\\
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.
\\\
\\\
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.
\\\
\\\
\\\
\\\
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
\\\
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
