Lawsuit Challenging Hostile Takeover
By Pacifica Board of Directors
URGENT:
DECLARATIONS NEEDED TO REMOVE THE PACIFICA BOARD

UPDATE

1. On Friday, September 10th, Pacifica's motion for a change of venue to Los Angeles was argued in
court. Pacifica wanted the lawsuit moved to Los Angeles arguing that Pacifica's by-laws state that the
principal place of business is there. Siegel argued that the principal office is of course in Alemeda County
next door to KPFA, that the various actions taken against KPFA by Pacifica took place here, and that a
Pacifica Board member, Peter Bramson, lives in Alemeda County so the lawsuit should stay in Alemeda
County. Judge Richman denied Pacifica's motion. The lawsuit will stay in Alameda County.

2. Pacifica's motion requiring plaintiffs (our side) to post a bond for Pacifica's attorney fees and costs will
be heard on September 22nd. If the judge rules for Pacifica on this motion, plaintiffs would be required to
deposit money up-front to an escrow account, paid to Pacifica if it wins the lawsuit. Usually attorneys' fees
and costs are are dealt with by the parties at the time of settlement or at the end of a lawsuit, with the
losing party often being required to cover costs, and occasionally being required to cover attorneys fees. Of
course we want to avoid having to front any money for either fees or costs if possible.

3. Pacifica's answer to the complaint is due to be filed September 20th.

4. Siegel has issued a request for documents from Pacifica as part of the discovery process. The request
includes documents regarding the by-laws and amendments, how executive committee members to the
Board are selected, and financial records for the 98-99 fiscal year that should include amounts spent by
Pacifica on legal fees, public relations and security guards, etc.

5. Deposition dates are in the process of being set to depose all Pacifica Board members.

Dan Siegel expresses his continued optimism in winning this lawsuit and states, "It's a shame Pacifica is
wasting our money fighting with us".

Letter from Our lawyer to the Pacifica Board - August 4. 1999

Filed: July 16, 1999 in Alameda County Superior Court
 
 

DAN SIEGEL, SBN 056400
SIEGEL & YEE
499 14th Street, Suite 220
Oakland, CA 94612
Telephone: (510) 839-1200
Telefax: (510) 444-6698
 

Attorneys for Plaintiffs
DAVID ADELSON, et al.

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
AND FOR THE COUNTY OF ALAMEDA
DAVID ADELSON, LAUREN AYERS, LYDIA BRAZON, CECELIA CARUSO, GAIL DIXON, ANNE EMERMAN, SHERRY GENDELMAN, TERRENCE GUY,
JIM HORWITZ, KAHLIL JACOBS-FANTAUZZI, DAWUD KHALIL-ULLAH, PELE DE LAPPE, STEVE LUSTIG, ERROL MAITLAND, ANDREW NORRIS, LEWIS O. SAWYER JR., MARIALICE WILLIAMS, and FRIEDA ZAMES, individually, and on behalf of all others similarly situated, and on behalf of the Pacifica Foundation, 
 No. 
Plaintiffs,






v.

VERIFIED COMPLAINT FOR 
INJUNCTIVE AND DECLARATORY RELIEF AND FOR DAMAGES FOR VIOLATIONS OF THE COPORATIONS CODE AND FOR UNFAIR BUSINESS PRACTICES

(Class Action)

PACIFICA FOUNDATION, a California Nonprofit  Corporation, MARY FRANCES BERRY, DAVID ACOSTA, JUNE MAKELA, ANDREA CISCO, FRANK MILLSPAUGH, JEWELLE TAYLOR- 
GIBBS, KEN FORD, ROBERT FARRELL, 
MICHEAL PALMER, WILLIAM LUCY, AARON KRIEGEL, ROB ROBINSON, PETER BRAMSON, and DOES 1-25, inclusive,

Defendants.
__________________________________

PRELIMINARY STATEMENT

1. Plaintiffs, who are members, contributors, and leaders of defendant PACIFICA FOUNDATION, bring this action to restrain and enjoin the unlawful and undemocratic actions of a majority of the Foundationís Board of Directors. The Board of Directors, without proper notice and in excess of its lawful authority, has purported to amend the Foundationís bylaws to eliminate the membershipís role in the election of directors and to thereby create a self-perpetuating Board without any accountability to the members and subscribers of the Foundation. Unless restrained, the Board now threatens to utilize its newly created powers to abandon the mission and historic role of the Pacifica radio network and threatens to sell one or more of the Foundationís five radio stations.

click here for the full text
 

Funds are needed to support this final effort to block the antidemocratic changes recently enacted.  Please help with whatever you can, just do it!! Please! Send contributions to:

Siegel and Yee Trust Account
(write "Pacifica suit" in the memo area of your check),
 499 14th Street #220,
Oakland, CA 94612
 

Letter sent to Pacifica Board of Directors - California law requires that a letter be sent prior to filing a suit, giving the corporation being sued the opportunity to voluntarily correct its violations.
 

June 14, 1999

Mary Frances Berry, Chair,
and Members of the Board of Directors Pacifica Foundation
1929 Martin Luther King Jr. Way Berkeley, CA  94704

Dear Chair Berry and Members of the Board of Directors:

 Pursuant to §5710 of the California Corporations Code, I am writing to initiate conversations with you to resolve the concerns discussed below. If the Board of Directors wishes to engage in an effort to address these issues, please contact me to begin the process no later that June 25, 1999. As you can imagine, my clients and I, as strong supporters of Pacifica's purposes and heritage, are eager to resolve this matter in an amicable fashion. Nonetheless, if we have not heard from you by that date, we will have no choice but to immediately file a lawsuit to seek the court's assistance in resolving these issues.

Please be advised that this firm currently represents the following members of Pacifica's Local Advisory Boards in connection with this matter: David Adelson (KPFK Los Angeles), Lauren Ayers (KPFA Berkeley), Lydia Brazon (KPFK Los Angeles), Cecelia Caruso (WBAI New York), Anne Emerman (WBAI New York), Sherry Gendelman (KPFA Berkeley), Terrence Guy (KPFK Los Angeles), Jim Horwitz (KPFK Los Angeles), Kahlil Jacobs-Fantauzzi (KPFA Berkeley), Dawud Khalil-Ullah (KPFK Los Angeles), Pele de Lappe (KPFA Berkeley), Steve Lustig (KPFA Berkeley), Errol Maitland (WBAI New York), Andrew Norris (WBAI New York), Lewis O. Sawyer Jr. (KPFA Berkeley), and Frieda Zames (WBAI New York). We expect that additional Pacifica Local Advisory Board members will join this effort in the days ahead. As these persons are represented by counsel in connection with this matter, you should not contact them directly with respect to the issues discussed in this letter. Instead, please address all such communications to me.

We hope that it is apparent to you that such a large number of long term and committed Pacifica members would not be taking this action without legitimate and serious concerns about recent actions of Pacifica's National Board of Directors.

As you doubtless know, at the heart of our concerns are actions taken by the National Board of Directors to disenfranchise Local Advisory Board members from their rights to nominate and vote to select members of the National Board. These actions are fundamentally undemocratic and move an organization that has historically been committed to democratic principles to one solely accountable to a small, self-perpetuating group.

Proposals to eliminate or reduce the role of the Local Advisory Boards in the selection of National Board members have been debated for at least two years. At the September 1997 National Board Meeting, following strong protests from LAB members and other Pacifica activists, the Board rejected a proposal to reduce by half the number of National Board members selected by the Local Advisory Boards and to add "signal area representatives" to the National Board. Instead, the National Board adopted a proposal to (1) Continue the practice of having each Local Advisory Board select two members of the National Board; and (2) Increase the number of at-large representatives by four.

The National Board also agreed that a majority vote of the National Board would be required to seat all Board members, no matter how nominated. The specific language of the bylaw changes was not articulated at the September 1997 meeting; rather, Pacifica's attorney was directed to draft appropriate language for final approval by the Board at a later date. It is unclear when, if ever, the Board approved the exact language that appears in the version of Pacifica's bylaws that states, "Most recent revisions 9/28/97."

Many people believed and hoped that this issue had been finally resolved. Nonetheless, on February 28, 1999, the National Board purported to adopt a bylaw change to eliminate completely the role of the Local Advisory Boards in selecting National Board members and to instead vest complete authority to select National Board members in the (National) Board Development Committee. We view the Board's actions as both illegal and completely contrary to the democratic principles to which Pacifica aspires.

The Board's action was illegal in two respects. First, Pacifica did not give proper notice of the vote on the proposed change in the bylaws. Second and more importantly, Pacifica failed to allow members of the Local Advisory Boards to vote on the proposed bylaw changes as required by law.

Section 5813 of the California Corporations Code states as follows:
 

 An amendment must also be approved by the members (Section 5034) of a class, whether or not such class is entitled to vote thereon by the provisions of the articles or bylaws, if the amendment would materially and adversely affect the rights of that class as to voting or transfer in a manner different than such actions affects another class. (emphasis added)

Here, there can be little doubt but that the members of Local Advisory Boards constitute a class of members within the meaning of §5813, because the bylaw change purportedly adopted by the National Board in February 1999 adversely affects their rights, and only their rights, to select National Board representatives. Prior to February 1999, Pacifica's bylaws required that there be two National Board members chosen by each Local Advisory Board and approved by the National Board. Even if the National Board rejected a Local Advisory Board choice, which to our knowledge never occurred, the Local Advisory Board had the right to present additional choices until one was approved.

Additional support for our position can be found in California Corporations Code §5056. Section 5056 provides that a person who, pursuant to the articles or bylaws of a nonprofit corporation, has the right to vote for directors of the corporation, is a "member" of that corporation. Clearly, the disenfranchisement of Local Advisory Board members was a matter that had to be submitted to the Local Advisory Boards for approval.

Finally, I want to address the argument that the National Board's action was required by the informal opinion of a Corporation for Public Broadcasting official who stated that it was unlawful for a Local Advisory Board member to sit on the National Board. Even assuming that this opinion was legally binding, it could easily have been met by requiring that a Local Advisory Board member selected for the National Board be required to resign from the local board.

I want to end by reiterating our sincere wish to resolve this matter short of litigation. I must remind you that many nonprofit corporations and groups, ranging from the American Civil Liberties Union to KQED television in San Francisco, elect their directors by vote of their entire membership. Pacifica, when faced with the question of changing its method of choosing its leadership, opted for the least democratic option imaginable. It is time to revisit this issue, and it should be unnecessary to require a court order to do so.

     Very truly yours,
 

     DAN SIEGEL

DS:pr

For some historical perspective: round one, 1997

FOR IMMEDIATE RELEASE

Contact: Dan Siegel, Esq. (510) 839-1200

Pacifica Listeners retain legal counsel in order to block implementation of illegal by-law changes by Pacifica's Board of Directors and to open Pacifica policy and financial documents to the public.

A coalition of listener groups and concerned individuals from across the nation has retained the services of Dan Siegel of the firm of Siegel and Yee in order to forestall the attempt by a group of Pacifica Directors to enact amendments to Pacifica's by-laws which would give a small, unelected group of Directors permanent control over the Pacifica Board of Directors' composition, and thus, permanent and absolute control of the Pacifica Foundation and its assets. These assets include broadcast licenses and facilities valued conservatively at $200 million.

In the face of growing opposition from community groups as well as local station boards, the Pacifica Board of Directors has violated Pacifica's own existing by-laws in an attempt to enact these controversial changes. These changes are part of a "5 -Year Strategic Plan" developed under the auspices of Pacifica CEO Pat Scott in a series of secret sessions over the past two years. Since this planning began, meetings have been closed to the public and minutes of the meetings declared confidential documents. Gag orders have been used to silence members of the organization wishing to bring concerns about the current management's expenditures, policies and activities to the public. Of particular concern, subscriber funds have been spent in a manner we consider inconsistent with the organization's purpose. The Foundation's management has made a concerted effort to prevent public knowledge of the details of these expenditures.

We have resorted to legal action because we believe that the conduct of the Board of Directors poses a serious threat to the continued survival of Pacifica Radio as an organization dedicated to the search for solutions to societal problems through community participation in radio broadcasting.

Many people have helped to create Pacifica radio and have a stake in its future. No plan for Pacifica's future is legitimate which has intentionally excluded the participation of all but a handful of Directors and Managers meeting in secret. Thus we desire to expose to public view policy, planning and financial documents improperly kept secret by Pacifica's Board of Directors.

Our aim is to create a climate where the many constituents and stakeholders of Pacifica can come together and openly discuss and plan for the organization's future in a manner consistent with the ideals of free speech, open democratic process, public accountability and creative community participation reflected in Pacifica's mission.

Dan Siegel will be representing us at the Pacifica Board of Directors Meeting in Washington, D.C. to be held September 27-29, 1997.

We need everyone's involvement and support now, in this legal challenge, and in the public dialog we hope will result.

We have incurred costs associated with legal representation. We are asking members of the Pacifica community who share our goals of insuring that Pacifica operates in a manner consistent with its expressed ideals to make your views felt by contributing to the Save Pacifica Legal Fund.

Please make checks to:

Siegel and Yee Trust Account
(please write "Save Pacifica" in the memo area of your check)
499 14th Street
#220
Oakland, CA 94612
 

Thanks,

Lauren Ayers
Jeffrey Blankfort
Dr. Helen Caldicott
City Lights Books, San Francisco
Lawrence Ferlinghetti
Lyn Gerry
Edward Herman
Thom Irwin
Philip David Morgan
Pacifica Accountability Committee, Los Angeles
Nancy Peters
Save Our Station, New York
Sue Supriano
Take Back KPFA, Berkeley

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