1 Kenneth N. Frucht, State Bar No. 178881
LAW OFFICES OF KENNETH FRUCHT ENDORSED
2 660 Market Street, Suite 300 FILED
San Francisco, California, 94104 ALAMEDA COUNTY
3 Tel:, (415) 392-4844
Fax: (415) 392-7973 SEP 1 9, 2000
4
ATTORNEY FOR PLAINTIFFS CLERK OF THE SUPERIOR COURT
5 By Yolanda Smith, Deputy
6
7 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
ALAMEDA COUNTY
8
9
ROBERT ROBINSON, RABBI AARON CASE NO. : 831286-0
10 KRIEGEL,
11 Plaintiffs,
12 v.
COMPLAINT FOR INJUNCTIVE
13 THE PACIFICA FOUNDATION, MARY AND DECLARATORY RELIEF
FRANCES BERRY, DAVID ACOSTA,
14 KEN FORD, MICHEAL PALMER,
ANDREA CISCO, FRANK
15 MILLSPAUGH, ROBERT FARRELL,
PETER BRAMSON, JOHN MURDOCK,
16 WENDELL JOHNS, KAROLOYN VAN
PUTTEN, VALRIE CHAMBERS,
17 BERTRAM LEE, BEFH LYONS, LESIE
CAGAN, TOMAS MORAN, and DOES 1 to
18 50, inclusive,
19 Defendants.
_________________________
20 INTRODUCTION
21 On April 15, 1949 in Berkeley, California, the Pacifica Foundation ("PACIFICA") aired the
22 country's first listener sponsored, community based radio program. Over the next 40 years, Pacifica
23 pioneered listener-sponsored community broadcasting in which listener volunteers performed the bulk
24 of the functions of owner/operators through their day-to-day management of station activities and
25 through membership contributions to the station.
26 While airing, politically, socially, and culturally diverse programming, PACIFICA has been
27 characterized by democratic governance and a high level of involvement of people in the communities
28 in which it operates. However, over the last several years, PACIFICA has been subverted by a small
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1 group of individuals who have acted to destroy any semblance of democratic participation, lawful
2 governance, accountability and fiduciary stewardship in order to consolidate and centralize their own
3 hold on power within PACIFICA's national governing body. Defendants have purposely ignored
4 state and federal law while stripping voting and advisory rights from the very communities that have
5 supported and sponsored PACIFICA. In doing so defendants have purported to make far-reaching
6 and destructive amendments to PACIFICA's by-laws in clear violation of the California Code of
7 Corporations and PACIFICA's own by-laws. Defendants have failed to respond to demands for
8 fiscal and governing accountability, and in the process they have trampled on and ignored the very
9 principles upon which PACIFICA was founded.
10 This lawsuit is brought by two current directors of PACIFICA's National Board of Directors
11 (the "BOARD"), and is necessary because defendants have turned a deaf ear to plaintiffs' demand
12 for democratic process and accountability. There are only two paths for PACIFICA at this time. One
13 is to allow the defendants to continue to monopolize their hold on governing power and to destroy
14 PACIFICA through a dereliction of network and station resources, mismanagement and lack of
15 fiduciary stewardship, and internecine strife. The other path is to remove the defendants from their
16 positions of corporate power and to ensure that PACIFICA and its governing bodies act within the law
17 and according to its founding principles and mission. This lawsuit seeks the latter path, and will return
18 PACIFICA to its constituency and members.
19
20 JURISDICTION AND PARTIES
21 1. This is a derivative action brought by plaintiffs as directors of, and in the right of and
22 on behalf of the Pacifica Foundation pursuant to California Corporations Code Section 5710.
23 2. Plaintiff Robert Robinson ("ROBINSON") is an individual who at all times
24 mentioned herein was a resident of the District of Columbia. Robinson is at this time a member of the
25 Board of Directors of the Pacifica Foundation.
26 3. Plaintiff Rabbi Aaron Kriegel ("KRIEGEL") is an individual who at all times
27 mentioned herein was a resident of the state of California. Kriegel is at this time a member of the
28 Board of Directors of the Pacifica Foundation
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1 4. Defendant Pacifica Foundation is and was at all times mentioned herein a public
2 benefit corporation organized and existing under the laws of the State of California
3 5. Defendants MARY FRANCIS BERRY, DAVID ACOSTA, KEN FORD, MICHEAL
4 PALMER, ANDREA CISCO, FRANK MILLSPAUGH, ROBERT FARRELL, PETER BPAMSON,
5 JOHN MURDOCK, WENDELL JOHNS, KAROLOYN VAN PUTTEN, VALRIE CRAMBERS,
6 BERTRAM LEE, BETH LYONS, LESLIE CAGAN, TOMAS MORAN, and DOES I through 10 are
7 directors of PACIFICA.
8 6. Plaintiffs lack sufficient information and belief to allege the true names and capacities
9 of defendants sued herein as DOES 1 through 50, inclusive. For that reason, plaintiffs sue said
10 fictitiously named defendants by such fictitious names and will seek leave to amend the complaint to
11 add their true names and capacities when the same have been ascertained.
12 7. At all times relevant to the complaint herein, defendants and each of them participated
13 in, authorized, ratified, aided and abetted the doing each of the acts alleged herein. Plaintiff is informed
14 and believes that each of these defendants is an agent and employee of the other defendants and each
15 of them, and proximately caused plaintiff's damages as herein alleged while acting in such capacity.
16 8. Prior to filing this action, PLAINTIFFS made repeated and continuous efforts to
17 secure from the Executive Committee (the "EXECUTIVE COMMITTEE") of the BOARD the action
18 requested herein. Specifically, PLAINTIFFS have asked the EXECUTIVE COMMITTEE to reinstate
19 democratic governance procedures and to institute procedures which would ensure the EXECUTIVE
20 COMMITTEE's accountability to the communities served by PACIFICA. On or about May 3l,
21 2000, PLAINTIFFS sent a letter to MARY FRANCES BERRY outlining the issues raised by this
22 complaint, and asking that the EXECUTIVE COMMIT'TEE and the BOARD address these issues.
23 9. PLAINTIFF's efforts at securing action by the EXECUTIVE COMMITTEE have
24 been unsuccessful, and have been ignored by the EXECUTIVE COMMITTEE PLAINTIFFS'
25 request that these matters be placed on the BOARD's agenda and discussed by the EXECUTIVE
26 COMMITTEE and by the BOARD have been rejected.
27 10. Prior to filing this action, PLAITIFF'S have, through written communications and
28 correspondence, informed the BOARD and each of the individual defendants of the facts upon which
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1 the causes of action stated in this complaint are based.
2 FACTUAL ALLEGATIONS
3 11. PACIFICA was incorporated as a California public benefit corporation on August 24,
4 1946.
5 12. PACIFICA set forth its founding mission in Article II of its Articles of Incorporation
6 in part as follows:
7 A. To establish a Foundation organized and operated exclusively for
educational purposes, no part of the earnings of which inures to the
8 benefit of any member of the Foundation.
9 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
10 radio broadcasting stations…
11 C. In radio broadcasting to provide outlets for the creative skills and energies of
the community; to conduct classes and workshops in the writing and
12 producing of drama; to establish awards and scholarships for creative
writing; to offer performance facilities to amateur instrumentalists, choral
13 groups, orchestral groups and music students, and to promote and aid other
creative activities which will serve the cultural welfare of the community;
14
D. In radio broadcasting operations to engage in any activity that shall
15 contribute to the lasting understanding between nations and the individuals
of all nations, races, creeds and colors; to gather and disseminate information
16 on the causes of conflict between any and all such groups; and through any
and all means compatible with the purposes of this Corporation, to promote
17 the study of political and economic problems and of the causes of religious,
philosophical and racial antagonisms.
18
E. In radio broadcasting operations, to promote the full distribution of public
19 information; to obtain access to sources of news not commonly brought
together in the same medium; and to employ such varied sources in the
20 public presentation of accurate, objective, comprehensive news on all matters
vitally affecting the community.
21
13. PACIFICA's first radio station, Berkeley based KPFA, began airing on 22 April 15,
22 1949. In subsequent years, PACIFICA acquired five radio stations which included KPFA; KPFK in
23 Los Angeles (1959); WBAI in New York (1960); KPFT in Houston (1970); and WPFW in
24 Washington D.C. (1977).
25 14. In addition to the network stations, PACIFICA has over 50 affiliate stations in 27
26 states and a Program Service and National News Bureau.
27 15. PACIFICA's radio stations have been characterized by a high level of community
28
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1involvement manifested through listener support and funding, volunteerism, and community based
2 programming. PACIFICA's radios stations have brought culturally, socially and politically diverse
3 news, viewpoints and education to the communities that PACMCA serves.
4 16. PACIFICA serves an important public role as it provides diverse and varied
5 programming and information that is unavailable on other "public" or commercial radio stations or
6 networks. In the furtherance of this role and in fulfilling the principles upon which PACIFICA was
7 founded, PACIFICA has used its airwaves and administered its affairs in a manner consistent with
8 principles of freedom of speech and expression and democratic governance.
9 17. PACIFICA annually receives more than $1.7 million dollars in federal funds through
10 the Corporation for Public Broadcasting ("CPB"), and is thus subject to the provisions of the Public
11 Broadcasting Act (47 U.S.C. Section 390 et seq.).
12 18. To qualify for receipt of CPR funds, 47 U.S.C. Section 396(k)(8)(A) of the
13 Communications Act requires that PACIFICA maintain community advisory boards that are
14 reasonably representative of the diverse needs and interests of the communities served by PACIFICA.
15 Section 396(k)(8)(B) of the Communications Act requires that 'The board shall be permitted to review
16 the programming goals established by the station, the service provided by the station, and the
17 significant policy decisions rendered by the station-'
18 19. In addition to ensuring compliance with the statutory requirements of the Public
19 Broadcasting Act, governance through democratic processes is an important and integral part of
20 PACIFICA's mission. Community inclusion in, and oversight of the governing process has
21 historically been ensured through the establishment of a Local Advisory Board ("LAB") for each of
22 PACIFICA's five network stations. Indeed, PACIFICA established its LABS before the CPB
23 required advisory boards, and the CPR requirements were drawn from PACIFICA's model. These
24 Local Boards have, throughout the history of PACIFICA, controlled the majority composition of the
25 PACIFICA's Governing Board.
26 20. Prior to 1997, PACIFICA's by-law provided for the election of a National Board of
27 Directors (the "B0ARD") by members of the LABS. Article 3, Section 2 of the by-laws stated that:
28 In order to be elected, a member must receive the nomination and vote of a majority
of the station board which s/he represents, unless such member is classified as an "at
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1 large" member, in which event s/he must be elected by a 2/3 vote of the Board of
Directors of the Foundation, voting by secret ballot, subject to approval of FCC
2 counse…"
3 21. Pursuant to the aforementioned by-law and PACIFICA's policies and procedures,
4 the BOARD was comprised of 15 persons. Two persons were nominated and elected from each LAB,
5 and five "at-large" members were selected by the BOARD. This process of selecting the BOARD
6 ensured that the LABS and their membership constituencies would have adequate representation and
7 input in PACIFICA's governance. It also guaranteed that a majority of voting members of the
8 BOARD would be made up of persons elected by the LABS, as 2/3 of the voting members of the
9 BOARD would be made up of persons elected by the LABS.
10 22. As a California non profit corporation, Pacifica is subject to the statutory framework
11 of the California Corporations Code (the "CODE"). Section 5150 of the CODE does not permit the
12 BOARD to make amendments to the by-law that "materially and adversely affect the rights of
13 members as to voting" without allowing the affected members to vote on proposed by-law
14 amendments.
15 23. CODE Section 5056 defines a "member" as "any person who, pursuant to a
16 specific by-law has the right to vote for the election of a director or directors…"
17 24. Pursuant to CODE Section 5056 and Article 3, Section 1 of PACIFICA's by-laws (as
18 set forth in Par. 20 of this Complaint), LAB members are "members" of PACIFICA.
19 25. CODE Section 5151 requires approval of a corporations members before the number
20 of directors on a corporate board of directors can be changed.
21 26. Eight BOARD members have been elected since October, 1999, increasing the
22 number of "at large" members beyond the limit of fifteen. This change had the effect of giving the
23 number of "at large" BOARD members a majority vote while making the number of members
24 selected from the LABS a minority. Because the change took voting power away from PACIFICA
25 members it was required to be approved by members of the LABS. The LABS were not allowed to
26 vote on this fundamental change in the make-up of PACIFICA's governing body.
27 27. At the time of the filing of this complaint, the EXECUTIVE COMMITTEE
28 comprises MARY FRANCES BERRY, DAVID ACOSTA, FRANK MILLSPAUGH, KEN FORD,
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1 ANDRA CISCO, ROBERT FARRELL, MICHEAL PALMER, PETER BRAMSON and JOHN
2 MURDOCK.
3 28. Since at least 1995, and continuing to the date of the filing of this complaint,
4 defendants, through the actions of the EXECUTIVE COMMITTEE (the "EXECUTIVE
5 COMMITTEE") of the BOARD have sought to centralize control of PACIFICA and to
6 fundamentally alter the mature of PACIFICA's mission by marginalizing the LABS and eliminating
7 processes of democratic governance. To effectuate this plan, defendants, through the EXECUTIVE
8 COMMITTEE, took measures to diminish any independent and effective role of the L.ABS in
9 PACIFICA's governance. Defendants plan culminated with the termination of two key KPFA
10 employees and the lock-out of KPFA staff in 1999, and the removal of PACIFICA's headquarters
11 from Berkeley, California, to Washington D.C.
12 29. In addition to inhibiting and then preventing any advisory role for the LABS,
13 defendants, through the EXECUTIVE COMMITTEE have sought to silence all internal criticism of
14 the EXECUTIVE COMMITTEE by applying "gag" orders prohibiting station employees and
15 volunteers from informing the listening public of any discontent or dissent within PACIFICA's
16 network radio stations. Employees and/or volunteers who disobeyed PACIFICA's gag orders have
17 been summarily fired.
18 30. In 1997, PACIFICA moved to further its suppression of free speech by incorporating
19 a "gag clause"' into its contract with affiliate stations, prohibiting those stations from publicly airing
20 criticism or opposition to PACIFICA's anti-democratic policies.
21 31. The policy of prohibiting employees, volunteers, and station affiliates from speaking
22 publicly about the EXECUTIVE COMMITTEE's efforts to eliminate democratic governance
23 processes directly conflicts with PACIFICA's historic mission of fostering and encouraging freedom
24 of speech expression. Said policies constitute impermissible prior restraints on freedom speech, and
25 violate the First Amendment of the United States Constitution.
26 32. In addition to the gag rule, PACIFICA does not provide for the airing of the BOARD
27 meetings and there are no reports to listener sponsors by officers of PACIFICA. The EXECUTIVE
28 COMMITTEE does not allow BOARD members to report on the board meetings over the air at the
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1 local stations.
2 33. Since 1995, the EXECUTIVE COMMITTEE has worked of, a plan to systematically
3 disenfranchise the LABS through eliminating the right of the LABS to elect representative directors to
4 PACIFICA's BOARD.
5 34. No Provisions exist in PACIFICA's by-law or Articles of Incorporation which give
6 the EXECUTIVE COMMITTEE the right or power to make unilateral decisions effecting
7 PACIFICA's governance without the approval and oversight of all of the members of the BOARD and
8 without the consent of the LABS. Nevertheless, beginning at least in 1995, the EXECUTIVE
9 COMMITTEE began taking such unilateral decisions aimed at dismantling any semblance of'
10 democratic governance at PACIFICA.
11 35. On July 12,1995 the EXECUTIVE COMMITTEE issued a memo that became
12 known as the "My Way Or The Highway" memo (the "Highway Memo"). This document advised
13 the LABS that there would be "vast changes" occurring at all of the stations, and that the
14 EXECUTIVE COMMITTEE would issue interim guidelines that would "supersede the local station
15 by-laws…"
16 36. In direct contravention of 47 U.S.C. Section 396(k)(8)(A), the Highway Memo
17 sought to destroy the advisory functions that the LABS performed. The memo stated that the LABS
18 served "at the will and direction of the National Board. The local station Board of Directors' main
19 responsibility is to carry-out the directives of the National Board and abide by its decisions."
20 37. The Highway Memo informed the LABS that there would be many fundamental
21 changes to the then current and longstanding practices at the stations, including the "elimination of
22 aspects of the traditional program format..." The memo stated further that "the National Board
23 expects the members of local Boards to assist and support the Manager...when asked and as needed."
24 38. The Highway Memo was drafted and distributed as an ultimatum, stating that
25 "members of any local Board who do not feel that they can assist Pacifica in its present mission are
26 advised to resign."
27 39. Finally, foreshadowing the destructive and anti-democratic plans of the EXECUTIVE
28 COMMITTEE, the Highway Memo retroactively froze membership on the LABS as of May 15, 1995.
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1 The immediate effect.of the retroactive "freeze" was to oust three KPFK LAB members who joined
2 that LAB between May 15,1995 and July 12,1995. The three ousted LAB members were all persons
3 who were critical of PACIFICA's anti-democratic policies.
4 40. The Highway Memo and subsequent actions of the EXECUTIVE COMMITTEE
5 were meant to ensure that only persons supportive of the EXECUTIVE COMMITTEE and its policies
6 would be allowed on the LABS.
7 41. Since 1995, EXECUTIVE COMMITTEE meetings have been held without notice to
8 the public and without allowing public attendance.
9 42. 47 U.S.C. Section 396(k)(4) requires that stations receiving CPB funding hold open
10 meetings of all committees and bodies, preceded by reasonable notice to the public. Only meetings
11 that relate to individual employees, proprietary information, litigation, or "confidential" matters may
12 be closed, and these meetings must be followed by a written explanation for not allowing public
13 attendance.
14 43. The majority of closed meetings held by the EXECUTIVE COMMITTEE since
15 1995 have not related to individual employees, proprietary information, litigation, or "confidential"
16 matters.
17 44. The EXECUTIVE COMMITTEE's illegal practice of conducting closed meetings
18 led to a 1996 complaint to the CPB about PACIFICA's undemocratic practices and its violation of
19 open meeting laws.
20 45. On April 9, 1997, the Inspector General of the CPB issued an audit report which
21 concluded that PACIFICA was not complying with open meeting laws by not providing proper notice
22 of its meetings and not allowing the public to attend and observe BOARD meetings and deliberations
23 and BOARD committee meetings and deliberations.
24 46. The Inspector General's audit also found that the LABS were not being allowed the
25 autonomy needed to perform their legally required advisory functions. Alluding to the Highway
26 Memo, the Inspector General recommended that "Local Advisory Board members should not be
27 threatened to blindly support Pacifica and local station policies and procedures, as well as their
28 programming."
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1 47. Despite the report of the CPB Inspector General, the EXECUTIVE COMMITTEE
2 has not ceased its practice of conducting business and making decisions in closed meetings, in
3 violation of the funding provisions of the Public Broadcasting Act. The illegal actions of the
4 EXECUTIVE COMMITTEE jeopardize PACIFICA's receipt of public funding and jeopardize the
5 future survival of PACIFICA.
6 48. For the past year minutes of board meetings have not been circulated for review and
7 approval by board members, and in direct violation of'the bylaws and the CODE, BOARD members
8 have not been able to obtain copies of the minutes of EXECUTIVE COMMITTEE meetings.
9 49. In June, 1997, defendant BERRY became the Chair of the BOARD.
10 50. In September, 1997, and February, 1999, defendants, through the EXECUTIVE
11 COMMITTEE, caused amendments to be made to PACIFICA's by-laws which took away the right of
12 the LABS to vote and elect representatives to the BOARD.
13 51. The EXECUTIVE COMMMITTEE did not allow the LABS to vote on the September.
14 1997 or February, 1999 amendments to PACIFICA's by-laws.
15 52. The September, 1997 and February, 1999 amendments to PACIFICA's by-laws
16 materially and adversely affected the voting rights of the members of the LABS. The amendments also
17 effected a fundamental and critical change in membership status in PACIFICA. By taking away the
18 LABS right to vote and elect the BOARD, the amendments turned members into nonmembers. The
19 amendments effectively ended PACIFICA's existence as a Public corporation comprised of voting
20 members.
21 53. As of the amendments of February, 1999, defendants and members of the
22 EXECUTIVE COMMITTEEF have refused and continue to refuse to recognize persons elected by the
23 LABS to sit as directors on the BOARD.
24 54. Since 1995 and continuing into the present, defendants and the EXECUTIVE
25 COMMITTEE have frequently met, conducted business, and made decisions affecting the governance,
26 structure and direction of PACIFICA without providing notice to all members of the BOARD, and
27 without obtaining the approval of the BOARD.
28 55. Since 1995 and continuing into the present, defendants and the EXECUTIVE
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1 COMMITTEE have frequently met, conducted business, and made decisions affecting the governance,
2 structure, and direction of PACIFICA without reporting to the BOARD or making minutes of the
3 EXECUTIVE COMMITTEE meetings available to the BOARD or the public as required by
4 PACIFICA's by-laws, the California Corporations Code and the Public Broadcasting Act.
5 56. Plaintiffs have never waived their right to be given notice of EXECUTIVE
6 COMMITTEE meetings, and have never consented to not being allowed to participate in the
7 PACIFICA's BOARD's decision making function. Defendants' manner of conducting business is
8 not, and has never been authorized by PACIFICA's by-laws or by the BOARD, and is in violation of
9 the CODE, including but not limited to Sections 5210, 5211 and 5212.
10 57. Plaintiffs, as members of the BOARD and of PACIFICA, have made continuous and
11 repeated requests to defendants to provide minutes of the meetings of defendants and of the
12 EXECUTIVE COMMITTEE in which decisions affecting the governance, structure, and direction of
13 PACIFICA have been made without BOARD approval or oversight. Defendants have refused, and
14 continue to refuse to allow plaintiffs access to Minutes of such meetings. Defendants have refused,
15 and continue to refuse to report to the BOARD regarding the meetings and decisions of the
16 EXECUTIVE COMMITTEE.
17 58. Since September, 1997 the EXECUTIVE COMMITTEE has functioned as a self-
18 selecting and self perpetuating body which acts outside of the scope of powers and authority permitted
19 by PACIFICA's by-laws and the CODE.
20 59. Defendants have furthered the EXECUTIVE COMMITTEE's self-perpetuation and
21 have "packed" the BOARD with persons supportive of the EXECUTIVE COMMITTEE's anti-
22 democratic policies, partially by allowing some directors to continue serving on the EXECUTIVE
23 COMMITTEE after their terms have expired.
24 60. Contrary to PACIFICA's by-laws, defendants DAVID ACOSTA, and FRANK
25 MILLSPAUGH continue to serve as directors of PACIFICA and as members of the EXECUTIVE
26 COMMITTEE despite the expiration of their terms.
27 61. The EXECUTIVE COMMITTEE attempted to justify directors serving beyond their
28 terms by amending the by-laws to allow directors to serve four three-year terms instead of two three-
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1 year terms. This amendment was applied retroactively to allow those directors whose terms had
2 already expired to remain on the BOARD.
3 62. The amendment materially and adversely affected the LABS by purporting to extend
4 the terms of already sitting directors, and thus allowing the EXECUTIVE COMMITTEE to refuse to
5 seat new directors elected by the LABS.
6 63. The EXECUTIVE COMMITTEE also changed the terms of office for officers and
7 EXECUTIVE COMMITTEE members from two years to three. Further, while the by-laws require
8 that election of the EXECUT'IVE COMMITTEE and of officers of the BOARD occur at the same
9 meeting, this requirement has not been complied with by the BOARD.
10 64. The EXECUTIVE COMMITTEE has refused and continues to refuse to recognize
11 and/or seat other elected or proposed BOARD members by claiming that the team of MAKELA,
12 ACOSTA and MILLSPAUGH have not yet expired.
13 65. The EXECUTIVE COMMITTEE has refused and continues to refuse to allow all
14 members of the BOARD to deliberate and participate in decisions relating to hiring of key PACIFICA
15 staff, and to choosing BOARD officers and BOARD committee members and functions.
16 66. Plaintiffs are informed and thereupon allege that the EXECUTIVE COMMITTEE
17 has placed one or more persons on the BOARD who are "interested persons" pursuant to CODE
18 Section 6322.
19 67. Plaintiffs are informed and believe, and thereupon allege that in violation of CODE
20 Section 6322, the EXECUTIVE COMMITTEE has failed to report transactions of "interested
21 persons" and has failed to make required reports and disclosures related to "interested persons" who
22 are serving as BOARD members.
23 68. The EXECUTIVE COMMITTEE has appointed John Murdock to the BOARD.
24 Murdock is a member of a law firm hired by PACIFICA. The nature of the relationship between
25 Murdock's law firm and PACIFICA has not been disclosed by the EXECUTIVE COMMITTEE, nor
26 were any contracts between Murdock's firm and PACIFICA been disclosed.
27 69. In January, 1999, plaintiffs requested that defendant BERRY rectify the problem of
28 directors serving beyond their terms. Neither BERRY nor any other member of the EXECUTIVE
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1 COMMITTEE have responded to plaintiffs' request.
2 70. After the illegal amendments to PACIFICA's by-laws, a wellspring of opposition to
3 the EXECUTIVE COMMITTEE was manifested in Berkeley, California. As a result of the actions of
4 the EXECUTIVE COMMITTEE, PACIFICA members filed a class action lawsuit seeking to reverse
5 the illegal actions taken by the EXECUTIVE COMMITTEE. This action is currently pending as
6 Alameda Superior Court Case No. 814461-0
7 71. Between Febrary, 1999 and July, 1999, several staff members KPFA who were
8 critical of PACIFICA policies were fired, including manager Nicole Sawaya. Numerous
9 demonstrations were held in Berkeley protesting the firings, the censorship of free speech, and the
10 illegal attempts by the EXECUTIVE COMMITTEE to dispense with democratic processes in
11 PACIFICA's governance.
12 72. Plaintiffs are informed and believe, and thereupon allege, that defendants and the
13 EXECUTIVE COMMITTEE determined to stifle the criticism of KPFA employees and volunteers by
14 orchestrating a crisis which would allow PACIFICA to lock-out employees, fire employees, sell
15 KPFA, and remove PACIFICA's headquarters from Berkeley to Washington, D.C.
16 73. Prior to July 13, 1999, defendants and the EXECUTIVE COMMITTEE, took
17 measures to continue airing KPFA's broadcast without the help of its employees or volunteers. These
18 measures included arranging to have audio tapes shipped to KPFA in Berkeley, and ordering an ISDN
19 line which would enable KPFA to broadcast using alternate sources of programming. The measures
20 also included bringing in staff to operate the station during a lockout, including KPFT manager
21 Garland Ganter.
22 74. On July 12, 1999, a member of the EXECUTIVE COMMITTEE leaked a document
23 reporting PACIFICA's secret plan to reprogram and/or sell KPFA.
24 75. The sale of KPFA would fundamentally alter PACIFICA's mission and vould
25 irreparably harm PACIFICA and its network stations.
26 76. On July 13, 1999, PACIFICA arrested KPFA employee Dennis Bernstein as he
27 broadcast and discussed PACIFICA's plan to sell KPFA. At that time Garland Ganter took KPFA
28 live broadcasts off the air, and began to play the audio tapes that had been shipped in previous weeks.
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1 77. KPFA employees and volunteers were locked out of the KPFA studios from July 13,
2 1999 through July 30, 1999. The EXECUTIVE COMMITTEE accomplished the lockout by hiring
3 guards who indicated to staff that they were armed, and by using coercion, threats, arrests and force to
4 keep KPFA staff and volunteers off of the station premises. During the KPFA lockout PACIFICA
5 encouraged the arrest of law-abiding and peaceful protestors.
6 78. As part of the planned stifling of dissent and centralization of power, the
7 EXECUTIVE COMMITTEE used the lockout and the peaceful protests as an excuse to remove
8 PACIFICA headquarters from Berkeley to Washington, D.C.
9 79. PACIFICA spent more than $500,000 to maintain the lockout of KPFA employees
10 and volunteers. These expenditures constitute an unnecessary waste of PACIFICA's funds, and were
11 made in bad faith by defendants and members of the EXECUTIVE COMMITTEE for the sole
12 purpose of stifling criticism of the policies of the EXECUTIVE COMMITTEE and of consolidating
13 the power that defendants and EXECUTIVE COMMITTEE members have assumed. The
14 EXECUTIVE COMMITTEES decisions relating to the funding and execution of the KPFA lockout
15 were not reported to the BOARD and were never authorized by the BOARD.
16 80. The EXECUTIVE COMMITTEE failed to take reasonable measures to safeguard
17 station equipment at KPFA during the lockout. The EXECUTIVE COMMITTEE failed to ensure that
18 qualified engineers familiar with the expensive equipment were on hand to properly operate said
19 equipment during the lockout. As a result, extensive and expensive to KPFA equipment were incurred.
20 Additionally, technical problems with KPFA's signal modulation during this period could have
21 threatened PACIFICA's license for KPFA.
22 81. Plaintiffs have made repeated requests to the EXECUTIVE COMMITTEE to provide
23 a detailed and itemized accounting of all expenditures that were related to or used in preparation for the
24 KPFA lockout. Plaintiffs' requests for an accounting and for access to PACIFICA's books have
25 been ignored by the EXECUTIVE COMMITTEE in direct violation of CODE Section 6334 which
26 allows for the absolute right of directors to inspect and copy all "books, records and documents of
27 any kind..."
28 82. Defendants have purposely and knowingly acted contrary to PACIFICA's founding
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1 mission and stated purposes. Defendants continue to threaten to destroy the fundamental purposes on
2 which PACIFICA was founded by threatening to sell PACIFICA's radio stations, including but
3 limited to KPFA, Berkeley. Defendants have purposely targeted KPFA in Berkeley because of the
4 high level of criticism KPFA employees have leveled against PACIFICA's illegal policies and conduct
5 and because of the high value of KPFA's air frequencies.
6 83. The EXECUTIVE COMMITTEE has attempted to increase revenue at the expense of
7 PACIFICA's founding mission by eliminating diverse and community oriented programming from
8 PACIFICA's radio network.
9 FIRST CAUSE OF ACTION
(Violation of California Code of Corporations Code)
10 84. Plaintiffs hereby incorporate by reference the allegations set forth in paragraphs 1-83
11 above as though fully set forth herein.
12 85. As set forth above, defendants have violated and continue to violate provisions of the
13 California Corporations Code, including but not limited to CODE Sections 5150, 5151, 5210, 5211,
14 5212, 5511, 5512, 6322, 6334.
15 86. Defendants have violated the California Corporations Code by taking actions which
16 include, but are not limited to the following:
17 A.Amending PACIFICA's by-laws in a manner that materially and adversely affected the
18 voting rights of members without allowing these members to vote on the amendments;
19 B. Failing to specify the number of directors who will serve on the BOARD;
20 C.Failing to notify members of the BOARD of regular and/or special meetings;
21 D. Failing to allow all members of the BOARD to exercise corporate powers and/or to
22 supervise and oversee the operation and function of BOARD committees;
23 E.Taking actions and make decisions as the EXECUTIVE COMMITTEE without authority
24 for such actions and/or decisions being conferred or delegated by the BOARD;
25 F.Failing to produce written minutes of EXECUTIVE COMMITTEE meetings to directors
26 when such a request is made;
27 87. In taking the actions described hereinabove, and in allowing said actions to be taken
28 in their names, the individual defendants MARY FRANCES BERRY, DAVID ACOSTA, KEN
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1 FORD, MICHEAL PALMER, ANDREA CISCO, FRANK MILLSPAUGH, ROBERT FARRELL,
2 PETER BRAMSON, JOHN MURDOCK, WENDELL JOHNS, KAROLOYN VAN PUTTEN,
3 VALRIE CRAMBERS, BERTRAM LEE, BETH LYONS, LESLIE CAGAN, and TOMAS MORAN,
4 failed to act in good faith or in the best interests of PACIFICA, and failed to act with the care,
5 including reasonable inquiry, that ordinary prudent persons in like positions would exercise under
6 similar circumstances. In taking the actions described above defendants committed gross abuses of
7 their authority and/or discretion.
8 SECOND CAUSE OF ACTION
(Breach of PACIFICA's By-Laws)
9 88. Plaintiff's hereby incorporate by reference the allegations set forth in paragraphs 1-87
10 above as though fully set forth herein.
11 89. By engaging in the conduct described above, Defendants have breached, and continue
12 to breach PACIFICA's by-laws.
13 90. In taking the actions described hereinabove, and in allowing said actions to be taken
14 in their names, the individual defendants MARY FRANCES BERRY, DAVID ACOSTA, KEN
15 FORD, MICHEAL PALMER, ANDREA CISCO, FRANK MILLSPAUGH, ROBERT FARRELL,
16 PETER BRAMSON, JOHN MURDOCK, WENDELL JOHNS, KAROLOYN VAN PUTTEN,
17 VALRIE CHAMBERS, BERTRAM LEE, BETH LYONS, LESLIE CAGAN, and TOMAS MORAN,
18 failed to act in good faith or in the best interests of PACIFICA, and failed to act with the care,
19 including reasonable inquiry, that ordinary prudent persons in like positions would exercise under
20 similar circumstances.
21 91. In taking the actions described above defendants committed gross abuses of thei
22 authority and/or discretion.
23
24 THIRD CAUSE OF ACTION
(Breach of Fiduciary Duty)
25 92. Plaintiffs hereby incorporate by reference the allegations set forth in paragraphs 1-91
26 above as though fully set forth herein.
27 93. As directors of PACIFICA, the individual defendants have a fiduciary duty to the
28 corporation and to its members.
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1 94. Defendants have breached their fiduciary duty by, among other things:
2 A. Ignoring the legal rights and interests of the LABS the members of the LABS
3 and other PACIFICA members, by expending PACIFICA funds in an
4 improper and wasteful manner;
5 B. By acting intentionally and knowingly against the principles and mission of
6 PACIFICA.
7 C. By surreptitiously making plans to reorganize PACIFICA's BOARD, sell
8 PACIFICA stations, and fundamentally alter the mission of PACIPICA without
9 seeking any input or advise from the LABS or from the listener sponsors of
10 PACIFICA's radio network.
11 D. By eliminating community-oriented programs and failing to develop
12 programming for diversity at the national or station level
13 95. In taking the actions and making the decisions described hereinabove, the individual
14 defendants MARY FRANCES BERRY, DAVID ACOSTA, KEN FORD, MICHEAL PALMER,
15 ANDRA CISCO, FRANK MILLSPAUGH, ROBERT FARRELL., PETFR BRAMSON, JOHN
16 MURDOCK, WENDELL JOHNS. KAROLOYN VAN PUTTEN, VALRIE CHAMBERS,
17 BERTRAM LEE, BETH LYONS, LESLIE CAGAN, and TOMAS MORAN, failed to act in good
18 faith or in the best interests of PACIFICA, and failed to act with the care, including reasonable inquiry,
19 that ordinary prudent persons in like positions would exercise under similar circumstances.
20 96. In taking the actions described above defendants committed gross abuses of their
21 authority and/or discretion and have therefore breached their fiduciary duty to the corporation and to
22 the members of the corporation.
23 FOURTH CAUSE OF ACTION
(Violation of Right to Free Speech)
24 97. Plaintiffs hereby incorporate by reference the allegations set forth in paragraphs 1-96
25 above as though fully set forth herein.
26 98. Defendants have instituted "gag" rules that constitute prior restraints an the speech
27 of PACIFICA employees and staff, and on the speech of the employees and staff of PACIFICA's
28 radio network stations;
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1 99. PACIFICA has punished employees and staff for exercising their right to free
2 speech;
3 100. Said "gag" rules and punishments violate free speech rights guaranteed by the state
4 and federal constitutions.
5 WHEREFORE, plaintiffs pray:
6 1. That the Court issue an order prohibiting PACIFICA's BOARD from removing
7 plaintiffs from their positions as directors during the pendency of this lawsuit;
8 2. That the Court declare that those amendments to PACIFICA's by-laws which
9 materially and adversely affected the voting rights of the LABS were made in violation of California
10 Code of Corporations Section 5150;
11 3. That the Court declare that members of the LABS are members of PACIFICA pursuant
12 to California Code of Corporations Section 5056;
13 4. That the Court issue an order revoking those amendments to PACIFICA's by-laws
14 which have materially and adversely affected the voting rights of the LABS;
15 5. That the Court issue an order prohibiting the EXECUTIVE COMMITTEE and
16 BOARD from making any amendments to PACIFICA's by-laws pending resolution of the issues
17 raised in this lawsuit;
18 6. That the Court issue an order prohibiting the EXECUTIVE COMMITTEE and
19 BOARD from making any material changes to PACIFICA's governing structure pending resolution
20 of the issues raised in this lawsuit;
21 7. That the Court issue an order revoking those amendments to PACIFICA's by-laws
22 which were made subsequent to those amendments which materially and adversely affected the voting
23 rights of the LABS;
24 8. That the Court issue an order allowing plaintiffs and plaintiffs' agents immediate
25 access to all books, records and documents of every kind that are under the control and/or custody of
26 any BOARD member and/or defendant PACIFICA;
27 9. That the Court issue an order removing members of the EXECUTIVE COMMITTEE
28 from membership on the EXECUTIVE COMMITTEE and BOARD on account of their breech of
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1 their fiduciary duties and gross abuse of their authority and/or discretion;
2 10. That the Court issue an order prohibiting the EXECUTIVE COMMITTEE and
3 BOARD from making any decisions affecting the assets and property of PACIFICA pending
4 resolution of the issues raised in this lawsuit;
5 11. That the Court issue an order prohibiting the EXECUTIVE COMMITTEE and
6 BOARD from making or enforcing any rules that constitute prior restraints on the free speech of
7 PACIFICA staff and employees and station staff and employee;
8 12. For costs of suit and attorneys fees;
9 13. For such other relief as the Court may deem just and proper.
10
11 Dated: September 19, 2000 LAW OFFICES OF KENNETH FRUCHT
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16 By:____________________________
Kenneth Frucht
17 Attorney for Plaintiffs
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