Return-Path: Received: from SOUTH-STATION-ANNEX.MIT.EDU by NL.CS.CMU.EDU id aa24520; 6 Jul 94 13:40:34 EDT Received: from haas.Berkeley.EDU by MIT.EDU with SMTP id AA25790; Wed, 6 Jul 94 13:33:04 EDT Received: by haas.berkeley.edu (5.65/Haas-1.34) id AA07182; Wed, 6 Jul 1994 10:32:46 -0700 X-Nupop-Charset: English Date: Wed, 6 Jul 1994 10:22:47 -0600 (CST) From: "Lee Forgue" Sender: eilis@haas.berkeley.edu Message-Id: <37371.eilis@haas.berkeley.edu> To: sca-reform@MIT.EDU Subject: Transcript of Mandamus Hearing I am posting this only to SCA-Reform. Please feel free to repost as you deem necessary -- I just don't want to flood everyone's mailbox with 700 copies of a rather long document. Remember that this is a court transcript -- the reporter writes what she heard, and people rarely speak in full sentences. Some of the more confused bits are explained at the beginning. By the way, I was at the hearing and remember this as being what was said, pretty much. --- eilis o'boirne ***************************************************** NOTES: There are some words misspelled, these appear as they exist in the transcript. Page 2, line 20-22: The judge actually did not use the first negative. Page 15, line 28 : "intimidate the directors on on the sea board." "intimidate the directors on the SCA board." Page 12, line 11: "didn't hear him addres ..." "didn't hear him address ..." The transcript was scanned and optically character recognized (OCR). This may have produced additional errors. This text file was produced as accurately as possible. IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF SANTA CLARA HEARD BEFORE COMMISSIONER JESSICA FRISCHLING, JUDGE DEPARTMENT 8-B --000-- MONICA CELLIO, WENDY L. ROEDER, ) DR. GREGORY ROSE, ET. AL., ) ) N0. 739306 PLAINTIFFS, ) VS . ) THE SOCIETY FOR CREATIVE ) ANACHRONISM, INC., ET. AL., ) DEFENDANTS. ) -------------------------------------) --OOO-- REPORTER'S TRANSCRIPT OF PROCEEDINGS HELD ON MAY 5, 1994 --000-- APPEARANCES: FOR THE PLAINTIFF: ERNEST H. GOLDSMITH, ESQUIRE FOR THE DEFENDANT: JAMES G. SEELEY, ESQUIRE COURT REPORTER: LILY A. SHINN, CSR #7610 LILY A. SHINN, CSR #7610 PAGE 1 SAN JOSE, CALIFORNIA MAY 5, 1994 PROCEEDINGS: (WHEREUPON, COURT CONVENED AND THE FOLLOWING PROCEEDINGS WERE HAD THE COURT: LINE ITEM 21, CELLIO VERSUS SOCIETY FOR CREATIVE ANACHRONISM. MR. GOLDSMITH: GOOD MORNING, YOUR HONOR. ERNEST GOLDSMITH REPRESENTING PETITIONERS IN THIS MATTER. MR. SEELEY: JAMES SEELEY FOR THE RESPONDENTS. THE COURT: ALL RIGHT. DID YOU REVIEW THE TENTATIVE RULING? MR. GOLDSMITH: I DID NOT SEE THE TENTATIVE. THE COURT: THE TENTATIVE RULING WAS OUTSIDE. IT WAS POSTED. THE TENTATIVE RULING IS TO GRANT THE PETITIONER AS TO THE BOOKS OF ACCOUNT SLASH BOOKS OF ORIGINAL ENTRY INTO THE LIST OF NAMES AND ADDRESSES OF MEMBERS DESCRIBED IN BY LAW SECTION 5. MR. GOLDSMITH: THANK YOU, YOUR HONOR. THE COURT: IS THERE ANY FURTHER ARGUMENT ANYONE HAS THAT IS NOT IN THE PAPERS? MR. GOLDSMITH: OBVIOUSLY, WE ACCEPT THE TENTATIVE RULING. THE COURT: ALL RIGHT. MR. SEELEY: YES, YOUR HONOR. I'D LIKE TO COMMENT ON -- PAGE 2 THE COURT: YOU UNDERSTAND IT IS NOT AS BROAD AS WHAT YOU ORIGINALLY ASKED FOR. MR. GOLDSMITH: I UNDERSTAND, YOUR HONOR. THE ONLY OTHER ISSUE I WOULD RAISE IS TO ASK THE COURT FOR ATTORNEYS FEES. THE COURT: WELL, WE'LL TAKE THAT UP LATER IN A MOMENT WHEN MR. SEELEY -- I WANT TO HEAR FROM MR. SEELEY. MR. SEELEY: REFERRING TO THE PETITIONER'S REPLY MEMORANDUM, I JUST WANTED TO MAKE SOME COMMENTS. THE COURT: YES, SIR. MR. SEELEY: IN THE FIRST INSTANCE OVER ON PAGE 2, IT IS QUITE CLEAR THAT THERE WAS THIS REQUEST FOR THESE RECORDS THAT ARE AT ISSUE. IT WAS PENDING. RATHER THAN WAIT FOR THE OUTCOME OF THAT REQUEST, THEY FILED A LAWSUIT. THIS WHOLE THING IS A PATTERN. IT'S KIND OF LIKE A CORPORATE TAKEOVER. THESE PEOPLE HAVE NO RIGHT IN GOVERNING US THEIR CONTRIBUTING MEMBERS. THE COURT: LET ME CLAR-- I SHOULD CLARIFY. I'M NOT MAKING MY FINDINGS FOR MY RULINGS UNDER THE ARTICLE 10 BYLAW RIGHTS NOT UNDER ANY CORPORATION CODE RIGHTS. IN OTHER WORDS, I UNDERSTAND THAT THEY'RE NOT STATUTORY MEMBERS AND THAT PART REFERS T0, AS I LOOKED AT THE STATUTORY SCHEME, APPEARS TO BE THE WHOLE NONPUBLIC CORPORATION. MR. SEELEY: THEN WHAT I WANT TO EMPHASIZE IS THAT THIS IS AN ORGANIZATION THAT IS RUN BY A BOARD OF DIRECTORS. THIS BYLAW CAN BE REVISED, AMENDED, PAGE 3 REPEALED TOMORROW OR TODAY FOR THAT MATTER AND IT'S - THE COURT: IT'S APPARENTLY REVISED IN MARCH. I DON'T THINK THAT I NECESSARILY HAVE THE -- ANY DOCUMENTS INDICATING THAT THE EXHIBIT I-A TO YOUR PAPERS. IT JUST SAYS REVISED MARCH 1994. I DON'T HAVE ANY NOTATION OF THE WORD ACTION BUT I ASSUME THAT HAS OCCURRED. MR. SEELEY: THIS IS AN INTERNAL MATTER IN OTHER WORDS. THE COURT: THE BOARD HAS TO MEET TO DO THAT RIGHT. MR. SEELEY: OH, YES; SURE. THE COURT: BUT FOR CLARIFICATION, EXHIBIT "A" TO YOUR OPPOSITION PAPERS IS THE CURRENT BYLAW. MR. SEELEY: CORRECT. THE POINT I'M MAKING IS THAT THIS -- THIS RIGHT IS GIVEN AT SEVERANCE OF THE BOARD, AND ALSO THIS IS NOT THE TYPE OF SITUATION WHERE THE COURT SHOULD INTERPRET THIS BYLAW. THIS IS A BYLAW THAT HAS BEEN ADOPTED BY THIS BOARD AND SHOULD BE SUBJECT TO INTERPRETATION BY THEM. THE ONLY STANDARD HERE IS WHETHER THAT INTERPRETATION IS REASONABLE. THE COURT OR CPA CAN'T GO BACK AND REINTERPRET OR TRY TO FIGURE OUT WHAT BOOKS OF ACCOUNT MEANS. IN FACT, WHAT DID HAPPEN HERE WAS THAT THE BOARD DID INTERPRET THE BYLAW. IT DID PROVIDE RECORDS AND THAT INFORMATION WAS REASONABLE CONSIDERING THE INTERESTS OF THESE PEOPLE WHO ARE MAKING THE REQUEST. AND I CITED FOR THAT SAME CASE THAT WAS CITED IN THE PAGE 4 PETITIONER'S MEMORANDA NICOLA CASE. NICOLA WASN'T VERY SATISFACTORY AS TO WHAT CONSTITUTES BOOKS OF ACCOUNT BUT IT DID SAY WHEN YOU ARE TRYING TO FIND OUT THE DEFINITION, YOU MUST DO IT IN CONTEXT. THIS IS WHAT THE BOARD HAS DONE. THE MATTER IS CLOSED. THE REQUEST HAS BEEN SATISFIED AND THE QUESTION IS MOOT. IN SUPPORT OF THAT, I WANT TO OFFER ONE CASE THAT WASN'T IN MY POINTS AND AUTHORITIES BECAUSE -- AND I THINK THE POINT HERE HAS BEEN REPEATED IN A NUMBER OF CASES. THIS IS A SITUATION -- NOT A SITUATION WHERE YOU'RE EXPELLING A MEMBER OUT OF AN ASSOCIATION AND HAS A PECUNIARY INTEREST IN THE ASSOCIATION OR EXPULSION WOULD EFFECT THAT PERSON'S LIVELIHOOD OR ANYTHING OF THAT NATURE. THE REMEDY HERE IS AS SET FORTH IN THIS POINTS -- REPLIED POINTS AND AUTHORITIES. THE REMEDY IS DON'T PAY YOUR DUES. JUST LIKE THE NATIONAL GEOGRAPHIC. IF YOU DON'T LIKE WHAT'S GOING ON IN THE NATIONAL GEOGRAPHIC AND YOU'RE A MEMBER OF THE SOCIETY, YOU SIMPLY DON'T PAY YOUR DUES. AND THAT'S THE SAME -- SAME AS WE HAVE HERE. WE HAVE THE TOURNAMENT ILLUSTRATED AS THE MAGAZINE OF THE SOCIETY, PAY YOUR DUES, YOU GET THIS. THAT IS THE DISTINCTION. WE WOULD ALSO ARGUE, YOUR HONOR, THAT THEY GOT BETTER INFORMATION THAN THEY WOULD WITH BOOKS OF ACCOUNT. WHAT IN THE WORLD ARE THEY GOING TO DO WITH ORIGINAL ENTRIES IN LEDGERS AND STUFF LIKE THAT? IT'S A MYSTERY. THEY HAVE NO INTEREST IN GOVERNANCE AT ALL. THEY HAVE THE RIGHT TO GET TOURNAMENTS ILLUSTRATED. PAGE 5 SO I SAY ALSO THIS WAS PART OF A HARASSMENT CAMPAIGN AS INDICATED IN MR. PROVINE'S DECLARATION, THAT ALL OF THE -- OF A SUDDEN, ALL THESE REQUESTS CAME IN AFTER THIS CONTROVERSIAL BOARD DECISION RAISING THE DUES. SO THE IDEA WAS TO FLOOD THE MAIN OFFICE WITH THESE REQUESTS. REMEMBER, THERE'S 25,000 MEMBERS. IT WOULD BE INCREDIBLE. I MEAN EVERY TIME ONE MEMBER COMES IN AND MAKES A REQUEST FOR SOME LITTLE BOOK OF ACCOUNT AND YOU CAN SEE THE PICKY TYPE OF STUFF THAT'S IN THIS REPLY MEMORANDUM. THEY DON'T LIKE THIS. THEY DON'T LIKE THAT. WHAT DID THEY GET? THE STUFF THEY GOT IS VERY -- IS VERY USEFUL. MORE THAN THE MEMBERS OF THE NATIONAL GEOGRAPHIC SOCIETY. I WOULD JUST SAY, YOUR HONOR, THAT THIS IS NOT A SITUATION WHERE A COURT SHOULD BE INVOLVED. AND IF YOU LOOK AT HOW BROAD THIS REQUEST IS ON PAGE 3 AND THEN MULTIPLY THAT BY 25,000 MEMBERS, THEY COULD BURY THE SOCIETY AND THAT'S ESSENTIALLY WHAT THEY HAVE TRIED TO DO. THE COURT: NOW, PAGE 3 OF WHICH DOCUMENTS, SIR? MR. SEELEY: OF THE REPLY. I'M JUST REPLYING TO THIS ONE DOCUMENT. I MEAN, THEY WANT DETAILED BALANCE SHEETS, ACCOUNTS PAYABLE, ACCOUNTS RECEIVABLE, GENERAL LEDGERS, IRS FORMS, ALL DATA SUPPLIED TO THE AUDITORS, THE AUDITORS OPINIONS AND NOTES. THE COURT: WELL, I BELIEVE THAT MY PAGE 6 TENTATIVE WAS AS TO THE BOOKS OF ACCOUNT AND ORIGINAL BOOKS OF ORIGINAL ENTRY. THAT DOESN'T NECESSARILY INCLUDE ALL THOSE DOCUMENTS THAT YOU'VE TALKED ABOUT. MR. SEELEY: N0. I'M POINTING OUT I JUST WANT YOU TO BE SURE YOU UNDERSTAND THAT THE COURT UNDERSTANDS HOW BROAD THIS REQUEST WAS, AND THAT IT WAS DENIED. I THINK IT'S ALSO IMPORTANT THAT THE SOCIETY IN GOOD FAITH SAT DOWN AND DEVELOPED A FORM FOR RESPONDING TO THESE REQUESTS BECAUSE THEY WERE SO BROAD, AND THE SOCIETY DEVELOPED THAT PROCEDURE AND THE SOCIETY INTERPRETED ITS OWN BY LAWS. AND IT'S NOT THE PROVINCE OF THE CPA OR ANYONE OF THESE CONTRIBUTORS TO SAY THAT THAT'S NOT SATISFACTORY. THAT IS THE BOARD'S DETERMINATION. IF THE BOARD IS CONSIDERING THE INTEREST OF THESE PEOPLE, IF THE BOARD INTERPRETED THAT IN AN UNREASONABLE OR ARBITRARY WAY, THEN I CAN SEE THAT THE COURT MIGHT INVOLVE ITSELF. BUT SHORT OF THAT, OUR POSITION IS THAT THE COURT SHOULD NOT INVOLVE ITSELF IN THIS MATTER. THANK YOU. THE COURT: THANK YOU. MR. SEELEY: DID YOU HAVE ANY QUESTIONS? THE COURT: WELL, AGAIN, I'M LOOKING AT THE BYLAW AND IT TALKS ABOUT THE BOOKS OF ACCOUNT MAY BE INSPECTED BY ANY MEMBER OR MEMBERS, THE AGENT FOR ANY REASONABLE PURPOSE AT ANY REASONABLE TIME. AND AS I NOTED IN THE REQUEST, IT WAS LOOKING AT FINANCIAL INFORMATION TO SEE IF THERE WAS, YOU KNOW, A BETTER WAY TO UNDERSTAND CURRENT FINANCIAL PROBLEMS AND PROPOSE PAGE 7 ALTERNATIVE SOLUTIONS WHICH I WASN'T HEARING THAT THERE WAS NOT -- THERE WAS AN OBJECTION AS FAR AS THE REASONABLE PURPOSE. MR. SEELEY: OH, YES, OF COURSE, THERE IS. THE COURT: AND I DON'T INTEND TO MAKE MY RULING TO CAUSE A BURDEN TO THE SOCIETY BUT MERELY TO LOOK AT THAT LANGUAGE. IT APPEARED THERE WAS A REASONABLE PURPOSE. AND IN THE BOOKS OF ACCOUNT, THERE SEEMS TO BE SOME CONCERN AS FAR AS WHAT WAS PROVIDED IN THE SUMMARY OF INFORMATION WAS NOT -- NOT SATISFACTORY FOR CONSTITUTING BOOKS OF ACCOUNT OR LOOKING AT WHAT THOSE NUMBERS ARE. NOW, GOING BACK TO THOSE ORIGINAL ENTRIES, THEY MAY NOT BE HELPFUL. IT MAY BE BETTER TO HAVE THE OTHER INFORMATION, BUT THAT'S NOT WHAT I'M PERMITTING. I DON'T INTEND TO MAKE IT BURDENSOME IF THERE'S TO BE INSPECTION, THAT HAS TO BE YOU KNOW, WITHIN BUSINESS HOURS ON NOTICE AND THOSE KIND OF THINGS SO THERE'S NOT A BURDEN TO THE SOCIETY. BUT I'M NOT HEARING THAT -- THAT IT'S NOT FOR REASONABLE PURPOSE AT THIS TIME. MR. SEELEY: YES. WELL, THERE HAS BEEN NO REASONABLE PURPOSE EVERY INDICATED IN ANY OF THESE PAPERS HAVING BEEN FILED BY PETITIONER. THE COURT: SIR, I WAS READING FROM -- I WAS READING FROM EXHIBIT "C" . MR. SEELEY: YEAH AND THAT -- THAT -- THAT IS NOT A REASONABLE PURPOSE AS APPLIED TO THE INTEREST OF THE PEOPLE WHO ARE REQUESTING THE INFORMATION. JUST PAGE 8 AS YOU AS A MEMBER OF THE NATIONAL GEOGRAPHIC SOCIETY CAN'T SAY, WELL, I WANT ALL YOUR FINANCIAL INFORMATION SO I CAN TELL YOU HOW TO RUN YOUR BUSINESS BETTER. AND THAT IS THE ISSUE. THERE IS NO REASONABLE PURPOSE THAT THESE PEOPLE HAVE IDENTIFIED. AND IF THERE IS, I HAVEN'T SEEN IT. AND I WOULD -- AS PART OF THE STATEMENT OF DECISION, I WOULD -- I WOULD URGE YOU TO LOOK VERY CAREFULLY AT THAT ISSUE. THAT REALLY IS PROBABLY THE ISSUE IN THE CASE THAT THERE IS NO REASONABLE PURPOSE THAT THESE PEOPLE HAVE IN THE INFORMATION THAT THEY HAVE REQUESTED OR THE INFORMATION THAT -- THAT IS IN THE TENTATIVE RULING. THE COURT: ALL RIGHT. MR. SEELEY: THAT IS -- THE COURT: I'M SORRY. I DIDN'T WANT TO CUT YOU OFF. WAS THAT -- I WAS GOING TO ASK MR. GOLDSMITH TO RESPOND TO THAT. MR. SEELEY: SURE. THE COURT: MR. GOLDSMITH? MR. GOLDSMITH: YES. I'D LIKE TO ADDRESS THE COURT'S CONCERNS. THE COURT: WHY DON'T YOU TAKE -- I THINK IT SEEMS TO BE MR. SEELEY'S REASONABLE PURPOSE. I'M LOOKING AT THESE -- THE SECTION 9 OF THE BYLAWS, PERMISSION. MR. GOLDSMITH: WELL, YOUR HONOR, PETITIONER, WHO REQUESTED THE INFORMATION, SAID I WANTED PAGE 9 TO UNDERSTAND FINANCIAL PROBLEMS. THE SECOND SENTENCE SAYS SHE WANTED TO MAKE SUGGESTIONS. APPARENTLY, THE RESPONDENTS FIND THAT TD BE REPREHENSIBLE. BUT AT ANY RATE, SHE SAYS SHE WANTED TO UNDERSTAND THE PROBLEMS. THOSE PROBLEMS WERE IDENTIFIED OR SUGGESTED IN LENGTH BY THE REPORTS ISSUED LAST YEAR ATTACHED TO OUR PETITION SUPPLIED BY THE SOCIETY ITSELF TALKING ABOUT THE FINANCIAL PROBLEMS. IT'S QUITE A REASONABLE REQUEST TO SAY THAT YOU WANT TO UNDERSTAND THE FINANCIAL PROBLEMS. AS TO THE NATIONAL GEOGRAPHIC I CAN'T SPEAK TO IT. BUT IF YOU DON'T -- IF THE BYLAWS SAID YOU HAVE A RIGHT TO LOOK AT THE BOOKS OF ACCOUNT, THEN I BELIEVE EVEN IF YOU'RE A MEMBER OF THE NATIONAL GEOGRAPHIC SOCIETY, YOU HAVE A RIGHT TO LOOK AT THE BOOKS OF ACCOUNT. AND I SUGGEST THIS IS NOT AN ONEROUS OR UNUSUAL REQUEST THAT THERE ARE -- VIRTUALLY EVERY CORPORATION IS SUBJECT TO SOME EXAMINATION BY ITS EITHER SHAREHOLDERS, MEMBERS, OR PEOPLE OF CLASS WHO ARE IDENTIFIED AS HAVING A RIGHT TO LOOK AT THE BOOKS. THE BOOKS MEAN THE BOOKS OF ACCOUNT. NOTHING ELSE CAN IDENTIFY A PROBLEM. IF THERE'S MISFEASANCE IN THE CORPORATION, THERE'S NO OTHER WAY TO FIND IT. THERE -- WHAT THE BYLAWS SAY IS THAT THEY'RE GIVING THE MEMBERS WHO ARE IDENTIFIED AS HAVING A RIGHT TO LOOK AT THE BOOKS OF ACCOUNT SOME MINIMAL LOOK AT THE INTERNAL OPERATION OF THE CORPORATION, AND IT'S THEIR ONLY OVERSIGHT INTO THE GOVERNANCE OF THE CORPORATION AND IT SHOULDN'T BE TAKEN LIGHTLY, AND IT SHOULDN'T BE IGNORED PAGE 10 AS COUNSEL SUGGESTS IT SHOULD. I SUGGEST TO THE COURT THAT WHAT WE'RE REALLY ASKING FOR CONTRARY TO WHAT COUNSEL CHARACTERIZES OR REQUESTS WHAT WE'RE ASKING FOR IS ENFORCEMENT OF THE BYLAWS. THERE'S NO SIGNIFICANT INTERPRETATION OF THE BYLAWS. WHAT IT APPEARS ON THE FACE OF THE BYLAWS THAT THESE PEOPLE AND -- RESPONDENT CONCEDES THESE ARE THE PEOPLE IDENTIFIED AS THE PEOPLE WHO HAVE A RIGHT TO LOOK AT THE RECORDS. THEN WE'RE ASKING FOR ENFORCEMENT WHICH IS A -- AND THIS PROCEEDING IS A PROPER PROCEEDING FOR ENFORCEMENT OF A RIGHT. I DON'T SEE ANY REAL INTERFERENCE IN THE GOVERNANCE OF THE CORPORATION BY THE COURT ENFORCING THAT RIGHT. THIS IS NOT REALLY AN INTERPRETATION ISSUE. AND IN THAT -- IN THAT LIGHT, I'D LIKE TO TAKE EXCEPTION TO THE COURT -- TO THE OFFERING OF THE -- OF THE WILLIAMS VERSUS INGLEWOOD BOARD OF REALTORS. I'M VERY FAMILIAR WITH THAT CASE, AND I SUGGEST THAT FOLLOWING THAT QUOTE IS LANGUAGE THAT SAYS THE COURT'S, HOWEVER, ARE NOT BOUND BY THE CONSTRUCTION ADOPTED BY THE CORPORATION, ITS OFFICERS OR ITS MEMBERS. THAT CASE CUTS BOTH WAYS. THAT CASE GIVES PLENTY OF OPTION AND LATITUDE TO THE COURT. IT WAS MISQUOTED I SUGGEST TO THE COURT. AND I COULD USE THAT CASE JUST AS EASILY TO SUGGEST THAT THE COURT NEED NOT BE BOUND BY THE CONSTRUCTION AND I QUOTED DIRECTLY FROM IT, YOUR HONOR. AS TO WHAT BOOKS OF ACCOUNT OR -- I THINK THIS IS A CASE WHERE WE'RE FORTUNATE TO HAVE A VERY RECENT PAGE 11 CALIFORNIA SUPREME COURT CASE THAT IDENTIFIES AND STATES CLEARLY WHAT BOOKS OF ACCOUNT ARE. SAYS THAT BOOKS OF ORIGINAL ENTRY -- IT POINTED TO TWO CASES AND ASSUMED THEY TOOK THEIR LANGUAGE. I THINK NOW IN CALIFORNIA, WE HAVE A DEFINITION OF THAT. THAT IS CRYSTAL CLEAR AND ROCK SOLID. I CAN'T -- I CAN'T SEE GOING AROUND THE SCHNABEL CASE WHEN IT IS SO CLEAR. THE COURT: THAT DOESN'T SEEM TO ME, HOWEVER, TO INCLUDE -- I THINK YOURS IS FOR SOME TAX RECORDS OR SOMETHING OF THAT NATURE. IT SEEMS TO ME THE BOOKS OF ORIGINAL ENTRY WOULDN'T COVER NECESSARILY TAX RECORDS. IF THERE WAS SOME CONCERN ABOUT THE TAX RECORDS, I SUPPOSE AS FAR AS THEIR BEING A PUBLIC BENEFIT FOR THE CORPORATION, ATTORNEY GENERAL'S OFFICE HAS SOME OBLIGATIONS WITH REGARD TO THOSE CORPORATIONS. AND -- BUT BOOKS OF ORIGINAL ENTRY TO ME WOULD BE THE BASIC -- THE ACCOUNTS OR LEDGERS. SO I'M -- AGAIN, I'M NOT READING THE REQUEST AS BROAD AS PERHAPS WHAT YOU'VE ASKED FOR ORIGINALLY. I JUST WANT TO CLARIFY THAT. MR. GOLDSMITH: WELL, WE UNDERSTAND THAT AND THE MEMBERS DO HAVE ACCESS BY FEDERAL LAW TO THE NONPROFIT CORPORATION ANNUAL FILING UNDER THE 994. AND SIMILARLY TO THE CHARITABLE TRUST FORM FILE WITH THE ATTORNEY GENERAL'S OFFICE OF CHARITABLE TRUST. SO THE SCOPE OF YOUR HONOR'S PROPOSED ORDER COMPORTS WITH -- THE COURT: IS SATISFACTORY. MR. GOLDSMITH: -- OUR NEEDS. THE COURT: ALL RIGHT. PAGE 12 THE COURT: ANYTHING -- WAS THERE ANYTHING -- MR. GOLDSMITH: WAS THERE ANYTHING ELSE YOU NEED ME TO ADDRESS, YOUR HONOR? THE COURT: N0. I THINK -- I WANTED TO JUST HAVE YOU ADDRESS THE ISSUE THAT MR. SEELEY RAISED CONCERNING REASONABLE PURPOSE. MR. GOLDSMITH: IS THAT TO THE COURT'S SATISFACTION? MR. SEELEY: MAYBE I WASN'T LISTENING BUT I DIDN'T HEAR HIM ADDRES THE ISSUE WHAT IS THE REASONABLE PURPOSE IN THIS CASE. THE COURT: I BELIEVE HE WAS REFERENCING TO "C" TO THE OPPOSITION. MR. SEELEY: HOW DOES THAT RELATE TO HIS - I MEAN, HE TALKED ABOUT STOCK HOLDERS IN A PRIVATE CORPORATION. YOU HAVE A STAKE IN THE COMPANY AND IT'S FINANCIAL ABILITY. THIS IS -- THE COURT: EXCUSE ME. AS I RECALL, HE REFERRED TO THAT. AND THEN HE ALSO REFERENCED TO SOME CORRESPONDENCE THAT WAS SENT TO THE MEMBERS ASSERTING THE FINANCIAL SITUATION OF THE ORGANIZATION. IS THAT WHAT YOU WERE SAYING? MR. GOLDSMITH: YES, YOUR HONOR. THAT TO UNDERSTAND FINANCIAL PROBLEMS. MR. SEELEY: WELL, I JUST -- I MEAN, I THINK IT'S NICE THAT THEY WANT TO KNOW THE FINANCIAL PROBLEMS AND I'M SURE THAT A LOT OF MEMBERS OF THE PAGE 13 AUDOBON SOCIETY AND THE NATIONAL GEOGRAPHIC SOCIETY DO ALSO. BUT THEY DON'T HAVE ANY RIGHT. IT DOESN'T MAKE SENSE TO INTERPRET THOSE, IN MY VIEW, THOSE BYLAWS THAT WAY AND -- BUT THAT'S REALLY NOT THE ISSUE. THE ISSUE IS WHETHER THE COURT FEELS THAT THIS IS A SIGNIFICANT ENOUGH ISSUE THAT THESE PEOPLE HAVE A SUBSTANTIAL ENOUGH RIGHT THAT IT IS GOING TO -- GOING TO IN EFFECT REWRITE THESE BYLAWS AS THEY'VE BEEN INTERPRETED BY THIS BOARD. AND I THINK THAT'S THE ISSUE THAT HE HAS NOT ADDRESSED. NOW, THE OTHER PART OF THIS IS ABOUT THIS -- THIS WILL NOT CAUSE UNREASONABLE DISRUPTION. I'D LIKE TO CALL MR. PROVINE AS A WITNESS. HE'S THE EXECUTIVE DIRECTOR. THE COURT: THERE ARE NO WITNESSES ON THIS; CALENDAR WITHOUT PERMISSION. MR. SEELEY: THEN I WOULD LIKE TO MAKE AN OFFER OF PROOF. IF HE WERE CALLED, HE WOULD TESTIFY THAT IT WAS A TREMENDOUS DISRUPTION AND HAS BEEN BECAUSE THIS -- THESE REQUESTS WEREN'T THE ONLY ONES THAT CAME IN AND THERE WAS TO REVISE ALL YOUR PROCEDURES AND THE LIMITED NUMBER OF PERSONNEL. OF COURSE, IT'S HUGE ANYWAY. THAT'S WHAT HE WOULD TESTIFY. HE WOULD TESTIFY THAT THERE WOULD BE SUBSTANTIAL INTERFERENCE. IN FACT, THIS WAS -- THE WHOLE PURPOSE OF THESE RECORDS REQUEST AND THE PURPOSE OF THIS LAWSUIT AND THIS IS A MEAN LAWSUIT. FOR EXAMPLE, PART OF THE PETITION ALLEGES THAT -- I BELIEVE IT'S PARAGRAPH 20. YOU MIGHT WANT TO ASK ABOUT WHY THIS ALLEGATION IS IN HERE ON PAGE 8. PAGE 14 PETITIONERS DO NOT WAIVE SUBSEQUENT CIVIL ACTIONS FOR THEIR OTHER RIGHTS INCLUDING BUT NOT LIMITED TO BREACH OF FIDUCIARY DUTY, VIOLATION OF THE BUSINESS JUDGMENT RULE, AND DAMAGES THEREFORE. WHY IS THAT IN THIS? IT'S FOR INTIMIDATION PURPOSES, YOUR HONOR, AND WE WOULD OFFER TO PROVE THAT THROUGH MR. PROVINE'S TESTIMONY. MR. GOLDSMITH: DID YOU WANT ME TO RESPOND TO THAT? THE COURT: ALL RIGHT. MR. SEELEY: INCIDENTALLY, THEY HAVE BEEN VERY SUCCESSFUL ALREADY. THEY'VE CAUSED THREE DIRECTORS TO RESIGN. MR. PROVINE ALSO TESTIFIED TO THAT. SO ALL OF THIS IS A PATTERN. THIS INCREDIBLE REQUEST -- LOOK AT THE BREATH OF THIS REQUEST. WHY IS IT SO LARGE? I MEAN, WHAT -- THERE'S NO INDICATION -- WE STILL DON'T KNOW WHAT HE'S GOING TO DO WITH -- WHAT THEY'RE GOING TO DO WITH THIS INFORMATION EXCEPT THAT THEY'RE TRYING TO INTIMIDATE THE DIRECTORS ON ON THE SEA BOARD. MR. GOLDSMITH: WELL, IN RESPONSE TO THE ACCUSATION AND INTIMIDATION, YOUR HONOR, THOSE WAIVERS ARE RIGHTS OUT OF THE FORM BOOKS. I THINK THEY'RE PROTECT LAWYERS FROM WAIVING -- INADVERTENTLY WAIVING RIGHTS OF -- RIGHTS OF CLIENTS. I CAN'T SEE THAT THAT IS GOING TO -- THAT THAT GOES WITH SOME FIREBRAND ISSUE. I SUGGEST THAT THE QUESTION WHAT WILL BE DONE WITH THE INFORMATION, IT'S -- I THINK IT'S OBVIOUS OR I THINK IT'S CLEAR IN THE LAW -- IN THE LAW THAT ALLOWS MEMBERS OF ORGANIZATIONS TO LOOK AT BOOKS OF ACCOUNT IS VERY PAGE 15 WIDESPREAD, THAT IT'S A CHECK ON THE GOVERNANCE. IT'S AN OVERSIGHT. IN THIS CASE, IT'S THE ONLY OVERSIGHT MECHANISM THAT EXISTS AND IT IS EXTREMELY IMPORTANT THAT IT BE HONORED. AND THE FACT THAT THE MANAGEMENT DOESN'T KNOW THAT IT IS -- WHAT IT'S GOING TO BE USED FOR I DON'T THINK IS REALLY THE ISSUE. I THINK IT'S THAT PEOPLE WHO HAVE A RIGHT TO IT AND WHO HAVE -- OBVIOUSLY HAVE BEEN TOLD BY THE MANAGEMENT THEMSELVES THAT THERE ARE PROBLEMS WANT TO FIND OUT WHAT THOSE PROBLEMS ARE AND THERE'S NO OTHER WAY TD DO IT BECAUSE THE REPORT THAT WAS FURNISHED WAS SO SKIMPY AND QUALIFIED TO BE RENDERED VIRTUALLY MEANINGLESS. ANYWAY, DOES YOUR HONOR HAVE ANY OTHER ISSUES THAT YOU WOULD LIKE ME TO ADDRESS? THE COURT: NOT RIGHT AT THE MOMENT. MR. SEELEY? MR. SEELEY: I WOULD POINT OUT THE SOCIETY DID RESPOND TO THE REQUEST. THEY DID ASK FOR THE PURPOSE. AND WHEN THE PURPOSE WAS GIVEN, THEY RESPONDED TO THAT PURPOSE. THE COURT: MAY I ASK COUNSEL TO APPROACH THE BENCH, PLEASE? (WHEREUPON, COUNSEL APPROACHED THE BENCH AND A DISCUSSION WAS HAD OFF THE RECORD THE COURT: ALL RIGHT. I ANYTHING FURTHER FROM EITHER SIDE? MR. GOLDSMITH: NOTHING FURTHER, YOUR PAGE 16 HONOR. SUBMITTED, YOUR HONOR. MR. SEELEY: I'D LIKE TO REQUEST A STATEMENT OF DECISION, AND I HAVE ONE WRITTEN OUT HERE THAT I'LL PROVIDE. I HAVE TO FINISH WRITING ONE I THINK AS FAR AS THE STATEMENT OF DECISION. THE COURT: I'LL GIVE YOU MY DECISION ORALLY ON THE RECORD RIGHT NOW AT THIS TIME, SIR. MR. SEELEY: PARDON? THE COURT: I'M GOING TO GIVE YOU MY DECISIONS ORALLY ON THE RECORD AT THIS TIME. MR. SEELEY: THIS IS A REQUEST FOR STATEMENT OF DECISION UNDER CCP 632. THE COURT: RIGHT. THIS IS -- THIS MATTER IS NOT EXCEEDING A DAY, AND I'M GOING TO GIVE YOU AN ORAL STATEMENT OF DECISION AT THIS TIME. I'M GOING TO GIVE BASIS OF -- MR. SEELEY: OH, SURE, BUT I HAVE TO SUBMIT -- BEFORE I SUBMIT THE CASE, I HAVE TO FILE THIS WITH THE COURT. THE COURT: WHY DON'T YOU HAND IT TO ME AND IF I CAN RESPOND TO THOSE AS I DO GIVE THE DECISION. IF NOT -- DID YOU WISH -- Mr. GOLDSMITH, DID YOU WISH TO RESPOND TO ANY OF THESE ITEMS? MR. GOLDSMITH: WELL, YES, YOUR HONOR. THE COURT: ALL RIGHT. MR. GOLDSMITH: FIRST OF ALL, NUMBER 2 IS A MOOT ISSUE. THE COURT HAS INDICATED THAT ITS RULING PAGE 17 DOESN'T GET INTO THAT -- TO THAT ISSUE THAT I'M -- I CAN'T SEE ANY RELEVANCE TO NUMBER 2. AND THESE ARE EXTREMELY BROAD REQUESTS. I THINK THE COURT -- AND I - I'M FRANKLY BAFFLED. I'VE NEVER SEEN A REQUEST FOR STATEMENT OF DECISION THAT ASKS THESE KIND OF -- ASKS FOR THESE KINDS OF BROAD FINDINGS. THE COURT: ALL RIGHT. MR. GOLDSMITH: I THINK -- I'LL LEAVE IT TO THE DISCRETION OF THE COURT. AND THERE'S SOMETHING, BUT I -- AND I DON'T QUITE UNDERSTAND THE LAST ONE WHETHER -- SOMETHING ABOUT A PURPOSE. I JUST SIMPLY LEAVE THIS TO THE COURT'S DISCRETION. THE COURT: MATTER NOW SUBMITTED, MR. SEELEY? MR. SEELEY: YES. THE COURT: ALL RIGHT. THIS IS A LAW AND MOTION MATTER. I'M GOING TO GIVE MY ORAL REASONS FOR MY DECISION AT THIS TIME AS THIS IS NOT PARTICULARLY A TRIAL MATTER SO THAT I'M NOT GOING TO FILE ANYTHING FURTHER FORMALLY UNDER CCP 632. AT THIS TIME, THE COURT IS GOING TO GRANT THE PETITION FOR WRIT OF MANDATE. I FIND THAT PETITIONERS ARE BENEFICIALLY INTERESTED AS DUE PAYING MEMBERS OF THE ORGANIZATION. I AM FINDING THAT UNDER ARTICLE 10 OF THE - I'M SORRY -- UNDER SECTION 10 OF THE BYLAWS THAT THEY DO HAVE RIGHTS TO ASK FOR THE BOOKS OF ACCOUNTS FOR REASONABLE PURPOSE AND REASONABLE TIMES, AND THE COURT PAGE 18 FINDS THAT THE PURPOSE TO REVIEW! THE FINANCIAL SITUATION PERHAPS MAKES SOME SUGGESTION AS A REASONABLE PURPOSE. AND IN THAT REGARD -- AND THAT I'M GOING TO INCLUDE BOOKS OF -- OR BOOKS OF ORIGINAL ENTRY AS THE BOOKS OF ACCOUNT AND GRANT THE REQUEST WITH THAT REGARD. IN SO FAR AS IT'S TO BE REVIEWED AND INSPECTED AT A REASONABLE TIME THAT COUNSEL ARE ORDERED TO MEET AND CONFER FOR A REASONABLE TIME THAT WILL NOT UNDULY DISRUPT THE OPERATIONS OF THE BUSINESS OF THE SOCIETY FOR CREATIVE ANACHRONISM AND ARRANGE A SPECIFIC DATE AND TIME THAT IS ACCEPTABLE AND HAVE THAT INFORMATION AVAILABLE AS I'VE INDICATED. AGAIN, I AM NARROWING THE INFORMATION THAT IS TO BE PROVIDED. I'M ALSO GOING TO GRANT IT AS TO THE LIST OF NAMES AND ADDRESSES OF MEMBERS AS DESCRIBED IN BYLAWS SECTION 5. I HAVE NOT HEARD OR NOTED IN THE PAPERS A BASIS FOR REFUSING THAT AND I DO SEE THERE IS A PROVISION IN THE BYLAWS THAT MAY CALL FOR IDENTIFYING PEOPLE. THE DIRECTOR THAT REQUIRES A MEMBER TO ENFORCE THAT HAVE THAT RIGHT TO HAVE ANY MEETING. IT APPEARS IT WOULD BE APPROPRIATE TO HAVE THE PETITIONERS BE ABLE TO CONTACT MEMBERS IF THEY SO DESIRE. IF THERE IS EXPENSE WITH REGARD TO THIS MEMBERSHIP LIST, THEN THAT REASONABLE EXPENSE WILL BE BORNE BY THE PETITIONERS. THE PEREMPTORY WRIT OF MANDATE IS GRANTED WITH REGARD TO THOSE SPECIFICS, AND THE COURT WILL RESERVE ON THE ISSUE OF ATTORNEYS FEES AND COSTS. IF YOU WISH TO PAGE 19 SUBMIT THAT EITHER WITH ANOTHER HEARING DATE WITH THE COURT OR THROUGH BRIEFS, YOU MAY DO SD. I SUGGEST COUNSEL MAY WANT TO MEET AND CONFER ON THAT ISSUE. MR. SEELEY: WELL, IS THERE ANY LEGAL BASIS AT ALL FOR ATTORNEYS FEES? THE COURT: I HAVEN'T SEEN ANY AUTHORITY FOR IT SO AT THIS POINT, I DON'T KNOW WHAT THE COSTS ARE. SO AT THIS POINT, I'M JUST GOING TO RESERVE THAT ISSUE. IT'S NOT FULLY BEFORE ME TO RULE ON AT THIS TIME. ALL RIGHT. AND MR. GOLDSMITH IF YOU'LL PREPARE THE DOCUMENTS. MR. GOLDSMITH: I SHALL, YOUR HONOR. AND WOULD THAT BE SUBMITTED TO COUNSEL? THE COURT: SUBMIT TO COUNSEL FOR HIS SIGNATURE AND COMPLY WITH LOCAL RULES. IF THERE'S NO SIGNATURE, THEN IN SPECIFIED TIME, YOU MAY DIRECT -- YOU MAY DIRECT IT TO THE COURT. ANYTHING FURTHER ON THIS MATTER? MR. GOLDSMITH: NOTHING FURTHER, YOUR HONOR. MR. SEELEY: N0, YOUR HONOR. THANK YOU. (WHEREUPON, THE MATTER WAS ADJOURNED ---000-- PAGE 20 STATE OF CALIFORNIA ) SS. COUNTY OF SANTA CLARA I, LILY A. SHINN, DO HEREBY CERTIFY: I AM A CERTIFIED SHORTHAND REPORTER OF THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF SANTA CLARA; AND THAT AS SUCH, I REPORTED IN STENOTYPE THE PROCEEDINGS HAD IN THE WITHIN-ENTITLED THE SAME IS A FULL, TRUE AND CORRECT TRANSCRIPTION OF SAID STENOTYPE AS REPORTED BY ME TO THE BEST OF MY ABILITY. DATED THIS DAY OF 1994. LILY A. SHINN CSR #7610