3.5.14 Hearing Transcript

1 RIVERSIDE, CALIFORNIA; WEDNESDAY, MARCH 5, 2014
2 BEFORE THE HONORABLE EDWARD D. WEBSTER

3 THE COURT: I'll call RIC1112557, Kaatz, Beach, and
4 Bradley versus Graham, et al.
5 I guess if plaintiffs' counsels could introduce
6 themselves.
7 MR. McCUNE: Good morning, your Honor. Richard McCune
8 and Michelle Vercoski for the plaintiffs.
9 THE COURT: Okay. Hold on.
10 MR. DAGGETT: Good morning, your Honor.
11 THE COURT: I'm sorry. What is your name, ma'am?
12 MS. VERCOSKI: Michele Vercoski.
13 THE COURT: How do you spell your last name?
14 MS. VERCOSKI: V, as in Victor, e-r-c-o-s-k-i.
15 THE COURT: And who will be the person answering
16 questions or making on oral presentation?
17 MR. McCUNE: I will, your Honor.
18 I would like to make one request. My paralegal is
19 here, and there's a lot of documents. Would you mind if she came
20 up to counsel table to assist?
21 THE COURT: I don't have a problem with that.
22 MR. McCUNE: Thank you.
23 THE COURT: You all have, I think, a different idea of
24 how this is going to be run than my idea. And since I'm the
25 Judge, I get to set the rules about that. So, again, with no
26 disrespect -- you put a lot of work into this, and it deserves to
27 be commended, the amount of hours and time and research -- and I
28 do commend you -- but, again, it's not particularly helpful for
TRINA N. FEHLMAN, CSR, RPR, CRR
1
1 me to have people restate what's already been addressed in their
2 arguments. Because I've already come to some pretty firm
3 conclusions based what I've already read. And so it's rare -- I
4 don't say it never happens, but it's rare that oral argument in
5 motion for summary judgment affects any change in the ultimate
6 decision that I already have running around in my head. It may
7 not be the right decision, I grant you that. But it's the best I
8 can do.
9 But, again, at this point in time, you reach a certain
10 point, I don't know if it's the eight-hour mark or the nine-hour
11 mark, of reading material, where you've decided pretty much this
12 is the way you're going to decide it.
13 Now, I'm grateful that there's a Court of Appeal,
14 because if I'm wrong, you'll have a chance to have them correct
15 any errors I made. And, again, this is the kind of case that I
16 would expect will go to the Court of Appeal, and I'm, kind of, a
17 waystation. I'll explain why in just a minute.
18 All right. So if I can have your name, Counsel.
19 MR. DAGGETT: Your Honor, my name is Jon Daggett.
20 That's J-o-n, D-a-g-g-e-t-t. And I represent Defendants Ricardo
21 Graham, Daniel Jackson, and Larry Blackmer.
22 THE COURT: You represent Graham --
23 MR. DAGGETT: Jackson and Blackmer, your Honor.
24 THE COURT: All right. Graham is the chairman of the
25 board of trustees for the PUC. And --
26 MR. DAGGETT: LSU, your Honor.
27 THE COURT: LSU. Right. LSU. And then, Mr. Blackmer
28 is the head of the North American Division of the Seventh-day
2
1 Adventist Church. And Mr. Jackson's the head of --
2 MR. DAGGETT: Jackson is the president of the North
3 American Division. And Blackburn is the vice president in charge
4 of education for the North American Division.
5 THE COURT: And you are?
6 MR. CONNALLY: Good morning, your Honor. Michael
7 Connally, C-o-n-n-a-l-l-y, of Lewis, Brisbois, Bisgaard & Smith,
8 for the Defendants La Sierra University, the Pacific Union
9 Conference of Seventh-day Adventists, and the North American
10 Division Corporation of Seventh-day Adventists.
11 THE COURT: All right. Thank you.
12 The first order of business, I think, is some material
13 was submitted to me which I did read, apparently stipulated. And
14 would you like me to sign the order so it's part of the record?
15 MR. McCUNE: I would, your Honor. Thank you.
16 THE COURT: Any objection?
17 MR. DAGGETT: No objections, your Honor.
18 THE COURT: All right. Mr. McCune, if you wish to make
19 an oral argument, you may do -- well, I guess it should be
20 Mr. Daggett or Mr. Connally.
21 Are you both going to address issues at this point?
22 MR. CONNALLY: We would like to, your Honor. We'd be
23 informed by -- if your Honor has a tentative ruling, we could
24 focus our arguments rather than going over things that would be
25 redundant.
26 THE COURT: No, I want you to make your argument now.
27 MR. CONNALLY: Okay.
28 THE COURT: And then what I will do is I will give you
3
1 my ruling, because there will probably be a ruling at that point
2 in time, after I hear your argument. And then I will answer any
3 questions how I came to it. And I'll try to give you as complete
4 a record as possible.
5 I want to indicate that there's so much material that I
6 don't think I could ever be as certain as I want to be that it's
7 the correct ruling. But I would certainly give you my best shot
8 and explain to you how I got to those decisions and, again, with
9 the understanding you may well disagree with me and I don't
10 begrudge your disagreement. Okay.
11 MR. CONNALLY: Thank you, your Honor.
12 I'd like to focus first, your Honor, on the Motion for
13 Summary Judgment and Adjudication of Issues by North American
14 Division and Pacific Union Conference. That motion presents its
15 own unique set of circumstances and is, in many respects,
16 narrower than the other motion. So it merits, we believe,
17 separate attention. And even within those, North American
18 Division, which -- if your Honor will accept the shorthand, I'm
19 going to refer to it as "NAD," and Pacific Union Conference, I'll
20 refer to as "PUC."
21 THE COURT: I will do so as well.
22 MR. CONNALLY: NAD is, in particular, in a different
23 set of circumstances and, therefore, we believe, merits its own
24 specific ruling in that North American Division is the general
25 church. The contentions that plaintiffs have attempted to raise
26 to try and create triable issues of fact don't apply to NAD, in
27 particular, because NAD was not in the room with the plaintiffs
28 when the resignations were requested. Much of the area where
4
1 plaintiffs have attempted to create a triable issue of fact by
2 contradicting their own deposition testimony in declarations,
3 which we've argued separately is not permitted, does not have any
4 effect on our argument as it relates to NAD.
5 The essence of the causes of action involving NAD --
6 THE COURT: Well, I think the causes of action against
7 NAD are fairly simply stated. They're saying that NAD operated
8 through Blackmer and Jackson, and that Graham was their agent.
9 And, therefore, Graham's actions are attributable to NAD. I
10 don't buy it. But again, maybe I can cut you short.
11 MR. CONNALLY: Ah. Well, we acknowledge that that's
12 part of their argument. But the problem with that is their whole
13 contention, is that the communication of the, quote, "principle,"
14 in that to the agent is all protected free speech, religious
15 governance, and association.
16 THE COURT: And there's also a Civil Code section about
17 interested parties. So, again, you don't have to beat that dead
18 horse unless you'd really like to.
19 MR. CONNALLY: No. We just wanted to make sure that it
20 merited its own separate attention because --
21 THE COURT: If I don't do it in my ruling, then you can
22 come back and ask me questions or supplement the comments. Can I
23 suggest that?
24 MR. CONNALLY: That makes perfect sense, your Honor.
25 Then the only other observation I would make at this
26 point in time, I think the papers have laid out in great detail
27 our position, but the key factor is that despite plaintiffs'
28 contentions that they are not arguing religious doctrine or
5
1 religious governance, it's very clear, at every turn, that where
2 they contend there's a triable issue of fact, it requires a Court
3 to interject itself into adjudicating church governance and
4 doctrine issues.
5 For example, they --
6 THE COURT: I understand that as well.
7 MR. CONNALLY: All right.
8 THE COURT: Because the overlying issue relating to
9 creating the earth in seven days as opposed to evolution was the
10 reason that Mr. Jackson, I guess it was, met with the parties
11 initially, before the surreptitious recording occurred at
12 Mr. Beach's home. So believe me, I've read more than just the
13 work-up.
14 MR. CONNALLY: Okay. Then at this point, I think it
15 would be best if we heard -- I'll defer to other counsel. But I
16 think our papers lay it out, and I reserve only time to address
17 issues, if need be, after we've heard your Honor's ruling.
18 THE COURT: All right. Mr. Daggett?
19 MR. DAGGETT: Thank you, your Honor.
20 I'm not going to rehash because, as you know, NAD could
21 only act through Jackson and Blackmer. I'm going to address
22 their issues first. So pretty much the same arguments.
23 THE COURT: You said Blackburn or Blackmer?
24 MR. DAGGETT: It's Blackmer.
25 THE COURT: Right.
26 MR. DAGGETT: So as the agents of North American
27 Division, of course, any actions NAD took would be through them.
28 I would like to emphasize a couple items, one of them
6
1 being that in the opposition -- plaintiffs' opposition, there's a
2 lot of discussion -- or, really, characterization of the facts to
3 try and show that there was some kind of direct employment
4 action, and that there was some involvement in coercion,
5 misrepresentation, et cetera, on the part of Jackson and
6 Blackmer. But really, at the end of the day, all they have done
7 is communicated the contents of the transcript and the recording
8 to Graham, who is the board chair. And so we think as that
9 communication, they had -- there's no allegations, really, that
10 there was any coercion -- no factual allegations there was any
11 kind of coercion or misrepresentation in that.
12 So we believe that the First Amendment certainly should
13 apply, to protect their ability to communicate on a religious
14 matter with the board chair of La Sierra in a matter of concern.
15 Another point that I'd like to point out, which wasn't
16 exactly covered in depth in the papers due to space, but the
17 plaintiffs refer -- or actually attach the trustee handbook as
18 one of their exhibits. And we'd give some attention -- both
19 defense counsel give quite a bit of attention to the provisions
20 in the bylaws that make it clear that LSU is an Adventist
21 organization. I'd like you to focus on a couple of things, your
22 Honor, if you would. I'd request that you focus on a couple of
23 things, one of them being the New v. Kroeger case, which makes it
24 very clear that corporate --
25 THE COURT: At 167 Cal.App.4th 800?
26 MR. DAGGETT: I can confirm that for you --
27 THE COURT: I have that here.
28 MR. DAGGETT: Yes. There's language in that case that
7
1 makes it very clear. And I'm not going to read it, but it's
2 mostly at page 820. And there's some other --
3 THE COURT: Right. "As the California Supreme Court
4 has explained, religious corporations are merely 'permitted as a
5 convenience to assist in the conduct of temporalities of the
6 church. Notwithstanding incorporation, the ecclesiastical body
7 is still all important.'"
8 MR. DAGGETT: Right, your Honor. And we didn't quote
9 the paragraph before that, but I think that also applies because
10 the plaintiffs' focus -- really, it seems to me, all of their
11 eggs in the basket of LSU being separately incorporated and,
12 therefore, independent. But even the prior paragraph says that
13 you can't look at the Corporations Code in a vacuum. Religious
14 corporations are different for a reason. And then it goes into
15 that description.
16 Another point is, if you look at the bylaws, like I
17 said, it's clear it's an Adventist organization. And the trustee
18 handbook has separate provisions. It flat-out says LSU is a
19 church institution. And it says that the chair is expected to
20 communicate with the church about objectives of the university,
21 and it's part of their job to try and coordinate the university
22 with the church's mission.
23 I don't see how that could happen if they can't
24 communicate with the church about what that might be. Plaintiffs
25 distinguish between persuasion and orchestration. But really,
26 the only definition of that, by looking at the plaintiffs'
27 papers, is orchestration is persuasion that someone doesn't agree
28 with. They have the right to talk about these things under the
8
1 First Amendment. They did so. And to find that there could be
2 tort liability for that, disregarding the First Amendment, really
3 makes it untenable for a church to run its institutions in the
4 way that it seems federal and California law have accepted as a
5 way a church is run. They may incorporate, but they can talk to
6 each other and operate towards a common mission.
7 As to Jackson and Blackmer, again, I'm not going to
8 rehash as to why they're not a stranger. Those are all clear in
9 the papers. I would like to bring up one specific issue as to
10 Graham. There's two causes of action as to Graham that are not
11 alleged against Jackson and Blackmer. One of them is the
12 interference with prospective economic advantage which, of
13 course, we point out there was no lawful conduct involved which
14 would justify that. The other, of course, breach of fiduciary
15 duty, that really, in its essence, seems to me impossible for a
16 Court to wade into without determining what are these interests.
17 It's clear that there's religious interests involved in both
18 institutions. And the Court is being asked to look at what are
19 those interests, do they conflict, did Graham properly exercise
20 his authority. I don't see how that can happen under the cases
21 involving the First Amendment, that it would be clear excessive
22 entanglement.
23 The last point I'd like to make is that punitive
24 damages, we've done a motion for a summary adjudication on the
25 issue. It is unopposed from the plaintiff. So I would urge that
26 the Court grant that adjudication as to that issue, in
27 particular, since it's unopposed.
28 THE COURT: I do have a question for you, Mr. Daggett.
9
1 MR. DAGGETT: Yes, your Honor.
2 THE COURT: I'm not sure it's even necessary to get to
3 the First Amendment issues here. But it seems to me the cases
4 seem to talk about a -- and give special deferences to churches
5 that have hierarchical organizational structure. And one of the
6 points is -- that you argued was that the Seventh-day Adventist
7 does have a hierarchical authority with the General Counsel, then
8 the North American Division, which is one of 13 Divisions?
9 MR. DAGGETT: That's right, your Honor.
10 THE COURT: And then, subdivide it further into the
11 different unions, of which there are nine North American
12 Divisions. And then, I assume from reading other cases that
13 below that, there are individual parishes that are organized
14 separately.
15 And LSU, we'll refer to that for Loma Linda --
16 MR. DAGGETT: La Sierra.
17 THE COURT: -- La Sierra University, is essentially
18 controlled by and, for all purposes, owned by the Pacific Union
19 Conference as opposed to the lower levels. Because if La Sierra
20 is dissolved or its property sold, the assets go to Pacific Union
21 Conference. And it looks to me, also, the way the bylaws are set
22 up, the people are elected, that the Pacific Union Conference
23 essentially has the majority voice in the trustees or running the
24 board of trustees. I think 22 or 23 of the trustees have to be
25 Seventh-day Adventist. You have to pick some from Arizona, pick
26 some from so forth. But it suggests to me, in practical terms,
27 and, also, what I gathered from the conversations that I
28 overheard between Mr. Graham, Mr. Beach, and the other gentleman,
10
1 that, obviously, the -- the union representatives or church
2 representatives are fairly significant.
3 So the question is -- with that argument, Mr. McCune
4 says, well, in another filing involving a personal injury in
5 Ventura County, you were stressing how separate every
6 organization is, independent. And, therefore, it seems to be
7 that you're talking out of both sides of your mouth in one
8 context or the other.
9 So I would just like to hear you address that issue.
10 Because that's the import I got is, here, you're talking about
11 how hierarchical they are and how they're so related and have
12 such a common interest, and, obviously, they have to talk. And
13 we're talking about basic First Amendment issues. And then they
14 say, well, wait a minute. Over here, you talk about how separate
15 they are and how unrelated they are and how, therefore, since
16 La Sierra University is a religious institution with tenure and
17 so forth and its own rules, it should be looked at completely
18 separately. That's the thrust I get with that argument. So if
19 you could just address that for me.
20 MR. DAGGETT: Happily, your Honor. Just a quick
21 clarification on the ownership issue. The Adventist Church is
22 unique in that it is theologically hierarchical. In a thumbnail
23 sketch of Adventist history, there's a lot of suspicion of
24 hierarchical churches, like the Catholic Church. So the
25 Adventist Church is kind of set up like a reverse hierarchy.
26 MR. McCUNE: I would object to argument outside of the
27 record, your Honor.
28 MR. DAGGETT: It's in the rec- -- okay. That's fine,
11
1 your Honor. I don't have a problem with that. The point is that
2 it's very clear in the papers. We're talking about a -- it is a
3 hierarchical -- theologically. The distinctions in the pleadings
4 that have been submitted by plaintiff to support their case is
5 that the church is not being inconsistent when it says it has no
6 control over the lower -- it admits it can't hire and fire people
7 in the lower entities. It can't direct what type of program
8 they're going to run in the spheres, for example, which property
9 it may buy or things like that. But it is very clear, including
10 in the papers that were -- I believe, the Marquez Motion for
11 Summary Judgment was one of the documents. It's very clear that
12 the church argues theologically, we're a single-unified church.
13 The fundamental beliefs show that. The statements of the people
14 who are the officers show that. And on theological issues,
15 certainly, they have the ability to require adherence to a
16 particular standard and act accordingly if things are not upheld
17 to that religious standard. But they do not have operational
18 control.
19 That's kind of the crux, I think, of plaintiffs'
20 argument, is they're trying -- because of that agreement on both
21 sides that NAD cannot operate LSU, they're trying to say that
22 there was something wrongful in the way the individual defendants
23 and NAD participated in this act. But the issue here is this is
24 a religious communication. They're theologically unified, and
25 they certainly have the ability, per their own governing
26 documents, to communicate about what that church mission is and
27 how to fulfill it.
28 THE COURT: Okay. That's fine.
12
1 Mr. McCune, did you wish to be heard?
2 MR. McCUNE: Yes, your Honor, I would. I would -- for
3 demonstrative purposes, I need to address -- sounds like, first,
4 the part you don't buy, which is the directive through Graham by
5 Blackmer and Jackson. And I'd like to provide your Honor with a
6 demonstrative, if I could, to go through that.
7 THE COURT: Okay.
8 MR. McCUNE: So I -- this may be a different order than
9 I started with. So on the issue as to whether this was a
10 directive by Jackson and Blackmer -- and I mean no disrespect by
11 calling them their last names, but I want to make this go a
12 little easier. If you start on the left, your Honor, this is all
13 through 2011. Now, on May 30, Larry Blackmer provided Daniel
14 Jackson a transcript. Then Blackmer and Jackson met with their
15 lawyers. And then that -- that is just the process of getting
16 the transcript. No problem. Plaintiffs' not complaining about
17 that at all.
18 That evening, Daniel Jackson calls past midnight, at
19 1:00. He calls Blackmer twice to complain about this transcript
20 and sends an e-mail that says that he is very angry and there
21 would be more to come later.
22 So he then -- he's, then, in California. He then
23 provides the transcript in person to Mr. Graham, and provides it
24 with instructions that this is an employment matter, and this is
25 something that should be dealt with by La Sierra. So if
26 that's -- as the defense would describe it, that was -- that was
27 the end of the involvement, that Jackson may have gotten worked
28 up, but he provides a transcript to Graham. And then both the
13
1 declarations of Graham and -- and Jackson are -- well,
2 essentially, at that point, it was now Graham's job to figure out
3 what to do with the transcript.
4 But the evidence shows something very different than
5 that, your Honor. On the very next day, twice, Jackson calls
6 Graham, which is in Exhibit 15 and then the newer Exhibit 39.
7 The following day, June 3, Jackson again calls Graham. We've
8 gotten the telephone records, so we know this. Over the weekend,
9 it's quiet.
10 On the 6th of June, Jackson then, who now says that
11 he's completely at peace and he's all comfortable and Graham's
12 handling it, provides a transcript to one of his employees at the
13 NAD and asks him to do something and to review it and make
14 recommendations, which that employee does and provides to him on
15 the 7th.
16 That same day, Jackson again e-mails Graham. The
17 following day, Jackson calls Graham, which is now the 8th.
18 On the 9th, Jackson once again calls Graham. They then
19 set up a conference call between Graham and Blackmer, counsel.
20 And that's where we believe that the instructions to Graham were
21 finalized. Then Graham goes forward the next day.
22 If you were to listen and read the argument made by the
23 defense, there would be nothing in between Graham provides a
24 transcript to -- or Jackson provides a transcript to Graham and
25 Graham terminates plaintiffs. But, in fact, there is much more
26 than just passive action. This -- clearly, the inference that
27 can clearly be drawn from the activity initiated by Jackson
28 supports that there is a disputed fact as to whether this was
14
1 Graham's action, taken alone on his own volition, or if this was
2 directed by Jackson.
3 That -- the final piece of that puzzle is immediately
4 after this meeting. The first thing that Graham does, he calls
5 Jackson to report how it went. And Jackson gives him a "good
6 boy."
7 We believe that those facts support an inference that
8 this was action not initiated or completed by Graham but,
9 instead, by Jackson.
10 The other telling aspect of that was the decision to
11 exclude the -- the administration of the university and the
12 non-church board members from that.
13 The issue on the independence, the Court describes this
14 as a personal injury matter, the Ben case. And where it is
15 different than that, in our view, is -- we're not saying the
16 cases are the same. But what we are saying is that the
17 admissions and declarations made in that case are relevant.
18 They are -- the church defendants now have a -- a
19 motivation to say that they are one. But when they had a
20 different motivation -- if you -- Exhibit 11, if I could read
21 from that, your Honor, it states -- paragraphs 14 through 17.
22 And this is a case involving a Seventh-day Adventist institution,
23 Caribbean Union, that's in the same position as La Sierra
24 University. The declaration provided by the church defendants
25 was the subordinate organizations are independent, are nonprofit,
26 educational, charitable, or religious institutions. These
27 entities each maintain a separate legal existence, and each is
28 responsible for its own legal obligations.
15
1 The issues related to other cases where the church owns
2 and controls these institutions are much different than that.
3 And, in fact, that could be no more highlighted than the
4 church -- Seventh-day Adventist Church actually owns and operates
5 three institutions, one of them that's ten miles away from here,
6 which is Loma Linda University. It has chosen to own those
7 institutions. It has chosen to set these institutions up as
8 separate institutions.
9 THE COURT: Does the PUC own La Sierra University?
10 MR. McCUNE: It does not. It does not contend it owns
11 La Sierra University. It contends it has potential ownership
12 interest if, in fact, La Sierra folds its -- its doors. It has
13 no right to encumber that land. It has no right to do anything
14 with that land.
15 THE COURT: Well, essentially, if the board of
16 trustees, 22 out of 23 which have to be members of the
17 Seventh-day Adventist Church, decides to end the existence of
18 Loma Linda -- La Sierra University, they could do so. And the
19 property then becomes the assets of the Pacific Union Conference;
20 correct?
21 MR. McCUNE: That is absolutely correct.
22 THE COURT: All right. Go ahead.
23 MR. McCUNE: But that's different than PUC having
24 ownership interest in it -- the ownership of it. And I might add
25 that the board structure was set up so that the Adventist voice
26 would be heard within the university. But -- but this isn't a
27 subsidiary, like in -- Toyota has a subsidiary for USA, where
28 it's a separate legal corporation, but the subsidiary answers to
16
1 the parent corporation, has full control. There -- it's
2 undisputed here from all parties that none of these defendants,
3 absent La Sierra University, has the right to hire, fire, demote,
4 supervise any of the employees of La Sierra University.
5 THE COURT: Well, except for the president and the
6 other people in administration, they do.
7 MR. McCUNE: Of La Sierra University.
8 THE COURT: Correct. The subordinate trustees can't,
9 directly.
10 MR. McCUNE: The board of trustees can, through
11 consultation with the president.
12 THE COURT: No, no, no. The board of trustees has
13 direct responsibility for evaluating the president and the
14 administration of the church. I think that is in the handbook
15 that you submitted to me.
16 MR. McCUNE: And that is -- that is correct, but with
17 consultation with the president.
18 THE COURT: No, not -- why would you consult with the
19 president if you are going to evaluate him himself? It doesn't
20 say that. It does say about faculty and tenure and so forth,
21 they're to consult with him and he's to act. But in terms of
22 reviewing his administration, I think it's different. Let me
23 see. Which -- somebody submitted the trustee --
24 MR. McCUNE: The trustee handbook, your Honor, is
25 Exhibit 2 to Plaintiffs' Evidence of Support of its Motion for
26 Summary Judgment. And I would -- it's on page 4. Well, that's
27 one of the issues.
28 THE COURT: Hold on. Let me find it first.
17
1 Does anybody have a copy of the trustee's --
2 MR. DAGGETT: You're looking for the trustee's handbook
3 or the bylaws?
4 THE COURT: Yes, trustee's handbook.
5 MR. DAGGETT: Yes, your Honor. Because I could find it
6 right away. Because I made a copy, the overview of trustee's
7 responsibilities. And I also made a copy -- I don't know what I
8 did with it -- that one section.
9 MR. McCUNE: It's Section 6.9 of the bylaws, your
10 Honor, which is Exhibit 1 to the plaintiffs' --
11 THE COURT: Right. Then there is also a B, at page 4,
12 which says, The power of the trustee in the operation of the
13 university is limited to policy-making level. The involvement of
14 the trustee in operational matters is strictly -- is restricted
15 primarily to establishing standards for evaluating, then engaging
16 in evaluations of the university president and university
17 administration.
18 MR. McCUNE: Correct.
19 THE COURT: That sounds to me almost like an
20 independent authority they have.
21 Now, I would assume they'd want to talk to the
22 president about those things. But it sounds to me like that's
23 independent responsibility.
24 MR. McCUNE: Your Honor, how I -- I believe that those
25 are reconciled is that the board of trustees is responsible for
26 supervising the president. The president is responsible for
27 supervising and managing the campus and making recommendations to
28 the board. The ultimate authority is with the board.
18
1 THE COURT: What happens if there's a concern of
2 misconduct by the president or other people in the administration
3 since -- as I think one of the gentleman's deemed, doesn't the
4 board, through the chairman of the board, have the independent
5 right to do that investigation under that section?
6 MR. McCUNE: I would say that the board chair does not,
7 independently. The board, as a whole, does. And that's not what
8 happened here.
9 THE COURT: All right. You may continue.
10 MR. McCUNE: The -- the fact that separates this case
11 from the other cases that deal with First Amendment issues -- and
12 I understand that the Court has had a more preliminary point on
13 this than that. But there are separate board bylaws, there's a
14 separate board, there's a separate administration. And the
15 Seventh-day Adventist Church has -- owns and operated its own
16 universities.
17 And then you combine that with -- the church defendants
18 have taken positions -- specific positions in declarations that
19 are admissions and useful for this case. That, in fact, the
20 educational institutions are independent makes this very
21 different.
22 The -- the issue that -- the next issue I'd like to
23 address for the Court is the apparent -- the comment the Court
24 made as to "stranger," that, I assume, is taken out of the
25 Applied Equipment Corporation. It -- as I attempted to interpret
26 the Court's comments was that if, in fact, the church defendants
27 had an interest in La Sierra University, then that provided them
28 the cover to have these kind of communications that I've been
19
1 discussing. Maybe that's putting words in the Court's mouth, but
2 that was my interpretation of it.
3 And I take that from some of the language that is in
4 Applied Equipment Corporation regarding what constitutes
5 interference with a contract from another company. And the
6 Applied Equipment Corporation was -- which is a Supreme Court
7 case from 1994, was the Court was dealing with the issue could a
8 contracting party be liable for interference of the contract that
9 it is a party to?
10 And what that Court said was, no, only strangers to
11 that contract could. But as pointed out in Woods v. Fox
12 Broadcasting, which is a 2005 case, which is 129 Cal.App.4th 344,
13 that -- that Applied also used the word "stranger"
14 interchangeably with noncontracting parties and third parties,
15 and that, specifically, the Applied case had not considered when
16 a noncontracting party that had some interest -- whether that
17 would prevent it from going forward with that.
18 The other case that -- that -- and your Honor, I --
19 this may be in our opposition and it might not be, but this was
20 something raised heavily on the reply, the Applied Equipment
21 case, is Powerhouse Motorsports versus Yamaha Motor Corporation,
22 which was just decided in November of 2013, which is 221
23 Cal.App.4th 867. And that involved a manufacturer and its
24 dealer. And there was a dispute as to the contract situation.
25 And the claim -- the defendant's claim was because of this
26 relationship between the manufacturer and the dealership, that
27 they were not strangers to the contract, that they had an
28 economic interest in the contract. So therefore, they could not
20
1 be strangers to the contract under Applied. The Court
2 specifically rejected that argument, and said that that's not
3 what Applied Equipment Corporation said. And it relied on
4 Woods v. Fox Broadcasting, the case that I just listed, for --
5 for the indicated.
6 And it -- it -- in a case -- there is not a case that
7 says having an interest in one of the parties gives that party
8 the right to interfere with the contracts. That is a misreading
9 of Applied Equipment Corp. And that's a misreading of Applied
10 Equipment Corp. that both Woods and the Powerhouse Motorsports
11 Group, in cases in 2005 and 2013, have made clear.
12 The line that the defendants are attempting to walk by
13 saying, we are all one in theology, but we are not one in our
14 legal relationship between one another except when we might be
15 sued for the conduct of one of the other entities, is one that is
16 not found in any of the other cases and is not found in the law.
17 The right to have ownership and control are what is relevant in
18 vicarious liability cases. The same thing that has provided them
19 the ability to escape liability for Caribbean Union College or
20 its publishing house or its conferences are (sic) exactly the
21 same thing that -- that provides them the position that they are
22 now, which they should have to answer, at least to a jury, on
23 these issues of fact as to whether there's responsibility. They
24 are -- they've taken a position that we want -- we don't want any
25 of the responsibility for La Sierra University. We don't want
26 any of the legal responsibility. But yet, when we don't like
27 what they're doing, we want to bypass that and take over control
28 of La Sierra University.
21
1 The issue as to whether they did that is a -- is a
2 question of fact that this Court is not in a position to answer,
3 as it is a triable issue of fact.
4 The defense didn't talk about whether the resignation
5 letters were properly obtained. I don't know if the Court wants
6 to hear me on that. But there's some indication that the issue
7 as to whether the use of that recording was wrongful had been
8 decided in the low -- in the demurrer action adverse to
9 plaintiff, and that is not correct. The -- the plaintiffs were
10 allowed to keep the wrongful language in the allegations. What
11 they were prevented from doing is making a claim under the Penal
12 Code that requires intentional action.
13 The use of a private conversation that was recorded
14 without information and knowledge is, in fact, an element that
15 the Court needs to consider as to whether these resignation
16 letters were voluntary. That is in connection with the issues as
17 to coercion and misrepresentations that include that there was no
18 advance notice of the reason for the meeting. Mr. Graham proudly
19 described it as he sprung it on the plaintiffs, that the --
20 Mr. Graham would not give a copy of the transcript not only to
21 the -- to the plaintiffs, but to the president of the university,
22 who was there.
23 And I might add, your Honor, that going back to the
24 issue as to what if the board had an issue with the
25 administration, there is no indication that the board and
26 Dr. Graham, in particular, had any reason to believe that there
27 was an issue with Randal Wisbey, the president of the university.
28 He was not one of the four people on the -- the recording. The
22
1 reason to bypass him did not have anything to do with he was
2 involved in the situation.
3 The -- the indication, by Dr. Graham, that if -- if the
4 three -- the three plaintiffs did not sign the letters of
5 resignation, he would release this private recording. And I
6 think the most egregious, at least from my viewpoint, is not
7 giving these three employees, that had been at this institution
8 for over 100 years, the weekend to think about it. This
9 transcript had been out for almost -- the defendants were aware
10 of this transcript for close to 45 days. There was absolutely no
11 reason that it couldn't have waited the weekend. They chose not
12 to do that because they wanted to put the pressure on the
13 plaintiffs to sign this letter of resignation without the
14 information, without counsel.
15 The First Amendment issues, there is not a case, and
16 there's not any of the cases cited by the defense, where an
17 institution that is affiliated but not owned or controlled is
18 found to be in a position of the sameness with the church, in
19 order to make a First Amendment argument right -- or argument.
20 The New versus Kroeger case cited by defense is -- is
21 so far off point. It is -- it was a case in which there was a
22 fight between congregation members who were on the board as to
23 control of the institution. That Court said, we're not going to
24 get involved in that. But the case of Sacramento Sikh Society
25 Bradshaw Temple versus Tatla, 219 Cal.App.4th 1224, specifically
26 said, "The fact that issues of church membership may fall within
27 the purview of church authorities does not mean that is always
28 the case. The question is whether resolution of the membership
23
1 issue requires reference to church doctrine rather than neutral
2 legal principles."
3 And that's where I'd like to finish here, your Honor,
4 is this talk about creation versus evolution. This Court is not
5 being asked to make a decision as to applying the fundamental
6 beliefs of the Seventh-day Adventist Church. That is a red
7 herring in the most large -- in its most significant way. This
8 has to do with whether these employees, none of which were
9 ministers, none of which were teaching religion, were required --
10 that had to answer to the defendants, outside of La Sierra. The
11 issue of answering to La Sierra is different.
12 Finally, just as a housekeeping matter, Counsel
13 indicated the plaintiffs had not addressed punitive damages and
14 had filed a nonopposition. I would invite the Court to look at
15 page 19, line 24 through 25 of our opposition. And there wasn't
16 specific time spent on that, because the fact section dealt
17 extensively with the facts that plaintiffs support -- that, I
18 believe, supports that claim.
19 So unless the Court has any questions of me.
20 THE COURT: I did have a couple of questions before you
21 sat down. I assume that Leonard Darnell's deposition was taken?
22 MR. McCUNE: It was, your Honor.
23 THE COURT: Did Jackson and Blackmer know their meeting
24 with the plaintiffs was being recorded?
25 MR. McCUNE: I have no reason to believe that, your
26 Honor, that they knew. I don't believe that they knew.
27 THE COURT: So then Mr. Darnell was surreptitiously
28 recording the conversation he had with Mr. Jackson and
24
1 Mr. Blackmer? Isn't that a violation of the Penal Code?
2 MR. McCUNE: I'm unclear of what the Court is referring
3 to. I don't --
4 THE COURT: Well, if Mr. Darnell is recording the
5 initial meeting had between the plaintiffs and Mr. Blackmer and
6 Jackson, unbeknownst to the people there, Jackson and Blackmer,
7 isn't that potentially a violation of the Penal Code?
8 MR. McCUNE: Whether it is, that would be on
9 Mr. Darnell, who's not my client. But I might add that that's a
10 public meeting with, literally, I think, hundreds in attendance.
11 So I -- I don't think the expectation of privacy would apply.
12 THE COURT: And what did he say was the reason why he
13 recorded that meeting?
14 MR. McCUNE: I don't know the answers to that, your
15 Honor.
16 THE COURT: And why did he send it to the Spectrum
17 website, which was accessible to the public generally?
18 MR. McCUNE: Related to the faculty meeting?
19 THE COURT: Uh-huh.
20 MR. McCUNE: Based on what he has said, it related to
21 that there was widespread interest in the Seventh-day Adventist
22 community about what was happening at La Sierra University.
23 THE COURT: All right. So there is no indication that
24 they wanted to get their side out and, essentially, publicize the
25 controversy, to gain whatever positional benefit they would get
26 from that.
27 MR. McCUNE: I would take -- I would take exception to
28 they, your Honor. If you're talking about Mr. Darnell, I don't
25
1 know what Mr. Darnell's motivation was. But to lump Mr. Darnell
2 in with my clients is not -- is not something that happened here.
3 THE COURT: Well, except that they were drinking and
4 laughing together --
5 MR. McCUNE: That they had a --
6 THE COURT: -- at Mr. Beach's house.
7 MR. McCUNE: Well, I would say that the description of
8 that as drinking and laughing together is not quite accurate
9 either.
10 THE COURT: I'll look through it and I'll explain to
11 you from the transcript where that appears, and we'll talk about
12 that later.
13 I'll go ahead and address the rest of this. All right.
14 First thing is, I'm going to read from the work-up that was done.
15 The work-up was done by Erin Orzel, who's here in court, and I'm
16 not going to take credit for it. I went through it and I looked
17 at the authorities. And I agree that she writes and expresses
18 herself, more often than not, better than I can, and she's
19 obviously brighter than I am. And I appreciate that. She's
20 probably brighter than almost anybody that does this calendar.
21 So I want to express to her thanks. I've disagreed with her in
22 the past, and I want to indicate that, to be sure. But again,
23 the work she did here, I thought, was extraordinary. So I can't
24 say it any better. So I'm going to state her work-up almost
25 verbatim at certain parts.
26 When that's done, I will also then go through what my
27 general impressions are about this case, because I think this
28 case is extraordinarily ill-advised for a lot of different
26
1 reasons. But I will be granting the four motions for summary
2 judgments and adjudications on all issues, as requested. I
3 believe that then makes it a matter of law, and the Court of
4 Appeal will independently review the matter. And so,
5 essentially, I am a waystation on the way to the Court of Appeal,
6 which does not bother me one bit. They have more time, they have
7 more resources, and they have the benefit of three justices to
8 talk the matter over, to come to a more proper decision, if I'm
9 wrong. Whatever they decide, I will certainly go along with.
10 I would guess, given the length of the trial, what's
11 happened here, that the attorneys' fees might be approaching as
12 much as a quarter of a million dollars. So I can't imagine the
13 case would end at this point. So I would think that since the
14 briefing is done, the issues are clear, it's a matter of law,
15 there shouldn't be a whole lot of additional cost to have the
16 Court of Appeal review my decision. I would encourage the
17 parties to do so.
18 At any rate, I'm reading now. And she makes this valid
19 point. This is Ms. Orzel. She says, quote, "In large, though,
20 nonconstitutional doctrines are sufficient to dispose of these
21 motions, and," quote, "'a fundamental and longstanding principle
22 of judicial restraint requires that courts avoid reaching
23 constitutional questions in advance of the necessity of deciding
24 them,'" citing Santa Clara County Local Transportation Authority
25 versus Guardino, spelled G-u-a-r-d-i-n-o, 11 Cal.4th 220, at 223.
26 So she did make a conscious effort to avoid the First
27 Amendment wherever possible. And this is what she writes -- and
28 I agree -- "As indicated above, all parties but LSU argue that
27
1 plaintiffs' claim against them are barred by the common interest
2 privilege, which states that -- which states that privilege
3 attaches to," quote, "'a communication, without malice, to a
4 person interested therein, (1) by one who is also interested,
5 or (2) by one who stands in such a relation to the person
6 interested as to afford a reasonable ground for supposing the
7 motive for the communication to be innocent, or (3) who is
8 requested by the person interested to give the information.'"
9 And that's Civil Code Section 47(c). "This privilege is most
10 often invoked in cases in which an employer talks to current
11 employees about the behavior or reasons for discipline of a
12 former employee. (See Civil Code Section 47(c), Deaile,
13 D-e-a-i-l-e, versus General Telephone Company, 1974, 40
14 Cal.App.3d 841, 846.) In fact, the opposition's sole argument
15 against application of this privilege is that it's been reserved
16 for employers who want to," quote, "'preserve employee morale and
17 job efficiency,'" citing to the opposition to the MSJ/MSA by PUC
18 and NAD at page 15, line 20.
19 "To the contrary," quote, "'the common interest of the
20 members of a church in church matters is sufficient to give rise
21 to a qualified privilege to communications between members on
22 subjects relating to the church's interest.' (Brewer versus
23 Second Baptist Church of Los Angeles, 48" -- I'm sorry -- "1948
24 case, 32 Cal.App." -- sorry -- "32 Cal.2d 791, 796, (Brewer).)
25 There appears to be no dispute that Graham, who is the president
26 of PUC and chair of LSU's board of trustees, Jackson, who is the
27 president of NAD, and Blackmer, who is NAD's vice president of
28 education, count as members of the church for these purposes.
28
1 Plaintiffs completely ignore the possibility that Graham,
2 Blackmer, and Jackson communicated with each other about
3 plaintiffs out of concern that the recording, which had gone
4 public, would damage the church because it appeared to contain
5 proof that plaintiffs had violated church tenets. In fact,
6 plaintiffs don't dispute that Jackson has the right to offer
7 opinion and counsel to LSU. (Response to NAD and PUC's separate
8 statement, Fact Number 38.)"
9 In fact, I think I read somewhere that the church --
10 they called it suasion -- I never heard of that word, but I guess
11 it's short for persuasion, s-u-a-s-i-o-n -- is common. So it's
12 inconceivable to me that if you have a recording like this, that
13 the president of the North American Division would not be
14 communicating with everybody connected with the church about
15 what's going on here and what's the right thing to do. And I
16 don't see why you wouldn't expect the North American Division
17 to -- to try to persuade and make its position clear as to what
18 they think the right thing should be to do. People do that all
19 the time within areas of concern to them. And I would think that
20 this recording would be a matter of legitimate concern to
21 everybody connected to the Latter -- to the Seventh-day Adventist
22 Church. But I'll continue.
23 "In my view, NAD and PUC meet their initial burden of
24 proving the common interest privilege absolves them of liability
25 on any claim alleging communications as the basis for liability
26 because they offer declarations from Jackson, Graham, and
27 Blackmer, who assert that they became involved with the
28 transcript because Blackmer obtained it, was dismayed at what he
29
1 heard, and passed it on to Jackson, who got upset and gave it to
2 Graham, who also became dismayed and decided to request
3 resignation letters from plaintiffs." That's Graham's
4 declaration, paragraph 7, page 255 of electronic copy of exhibits
5 accompanying NAD and PUC's motion; Jackson's declaration, at
6 paragraph 7 to 10, pages 262-263 of electronic copy of exhibits;
7 Blackmer's declaration, paragraph 6, page 266 of exhibits. "I
8 don't think plaintiffs met their opposing burden for the reasons
9 set forth below.
10 "Plaintiffs offer no reason of any kind why the
11 conversations these individuals had with each other about the
12 recording aren't subject to the common interest privilege, even
13 though the conversations were motivated by a fear about the
14 effect of the recording's release upon the church. Instead, they
15 attempt to show that Blackmer and Jackson did more than just hand
16 the matter over to Graham so he could decide how to handle
17 disciplining plaintiffs, and alleged that they, in fact, ordered
18 Graham to get rid of plaintiffs. In my view, this does no more
19 than to highlight the extent to which Blackmer and Jackson were
20 concerned about their church, since all plaintiffs arguably show
21 is that they made efforts to have the recording transcribed and
22 that Jackson really, really wanted LSU to start complying with
23 church doctrine regarding teaching creation. Plaintiffs offer
24 testimony from Robert Andringa," A-n-d-r-i-n-g-a, "Ph.D., who at
25 some point consulted with some of the parties about the propriety
26 of LSU's actions, because he opines that Graham acted
27 improvidently in requesting resignations, but they make no effort
28 to show why this lone opinion means that Blackmer, Graham, and
30
1 Jackson weren't concerned church members who wanted to address
2 public perceptions of impropriety.
3 "The common interest privilege affects the following
4 causes of action in the following ways.
5 "The fifth cause of action for interference with
6 contract is alleged against PUC, NAD, Graham, Blackmer, and
7 Jackson. Plaintiffs allege each of these defendants disregarded
8 LSU's corporate structure and caused LSU to breach their
9 employment agreements. TA -- Third Amended Complaint, paragraph
10 153. As to Blackmer and Jackson, however, the most plaintiffs
11 have alleged is that they talked to Graham about their concerns.
12 As set forth above, these comments can't create liability to
13 the -- due to the common interest privilege. I recommend
14 granting the motion as to Blackmer and Jackson as to -- and as to
15 NAD, because it's only alleged vicariously liable for the actions
16 of Blackmer and Jackson.
17 "Graham is a bit more complicated. I think there's
18 probably something to the idea that Graham's act of demanding
19 resignations goes beyond what he said, such that the common
20 interest privilege can't apply. However, as set forth below, I
21 think Graham's actions are subject to managerial privilege, which
22 generally relieves employees with managerial authority of
23 liability for inducing breach of an employment contract by the
24 employer. (See Halvorsen, H-a-l-v-o-r-s-e-n, versus Aramark
25 Uniform Services, Inc., 65 Cal.App.4th 1383 at 1391, 1392.)
26 Plaintiffs' opposition brief insists Graham stood to individually
27 benefit from his actions, such that he can't claim protection
28 from managerial privilege. (See, namely, Graw, G-r-a-w, versus
31
1 Los Angeles County Metropolitan Transportation Authority,
2 (C.D.Cal. 1999) 52 Fed.Supp.2d 1152.) However, they present very
3 little evidence on this point. The most they offer is that he
4 was up for renomination as president of the PUC, such that he had
5 an incentive to follow his superiors', (i.e., Jackson and
6 Blackmer's) orders. Even if Jackson was sitting on the committee
7 charged with deciding whether to renominate Graham, there's no
8 evidence that Jackson or Blackmer were, in fact, Graham's
9 superiors. The bigger problem I have is that this line of
10 argument ignores the fact that Graham submitted plaintiffs'
11 resignations to the LSU board, which then accepted them. The
12 resignations, then, weren't just an act taken by Graham,
13 individually. I see no evidence that Graham's decision to demand
14 resignations was an act of self-interest rather than an act
15 motivated out of concern about the effect of what was said on the
16 recording on the university and/or church. I recommend granting
17 the motion as to him and PUC, which is allegedly vicariously
18 liable for Graham's actions, due to the managerial privilege.
19 This leaves no defendants remaining on this cause of action.
20 "The sixth cause of action for interference with
21 prospective economic relations is premised on the theory that the
22 PUC" -- I'm sorry -- "that PUC and Graham exerted improper
23 influence over LSU and thereby interfered with its economic
24 relationship with plaintiffs. (Third Amended Complaint,
25 paragraph 162.) Because Graham is PUC's president, I see no
26 allegation about any other PUC employees. It looks like PUC can"
27 act -- I'm sorry -- "it looks like PUC can only be vicariously
28 liable if Graham is liable. Based on the above discussion, any
32
1 attempt to make Graham liable for discussing the recording with
2 plaintiffs or any church member is barred by the common interest
3 privilege.
4 "I'm aware of no authority allowing the Court to extend
5 the managerial privilege outside the context of a cause of action
6 for interference with contract. This cause of action may not be
7 barred by any immunities, but it fails for an independent reason.
8 The elements of a cause of action for interference with
9 prospective economic advantage are, quote, '(1) an economic
10 relationship between the plaintiff and some third party, with the
11 probability of future economic benefit to the plaintiff; (2) the
12 plaintiffs' (sic) knowledge of the relationship; (3) intentional
13 acts on the part of the defendant designed to disrupt the
14 relationship; (4) actual disruption of the relationship; and (5)
15 economic harm to the plaintiff proximately caused by the acts of
16 the defendant.'" And that's citing Korea Supply versus Lockheed
17 Martin Company, 2003, 29 Cal.4th 1134, at 1153. "In addition, a
18 plaintiff must allege some act by the defendant that was, quote,
19 'independently wrongful,' (Ibid., et seq. page 1158.) "Quote,
20 'An act is independently wrongful if it is unlawful, that is, if
21 it is proscribed by some constitutional, statutory, regulatory,
22 common law, or other determinable legal standard,' end quote
23 (Ibid., at 1159). Here, plaintiffs make much of the fact that
24 Graham, by himself, lacked authority to terminate them because
25 only LSU's board could do that. The problem is that they point
26 to no prohibition on his asking them to resign and then
27 submitting the resignations to the board for approval. In other
28 words, there's no proof that Graham actually disregarded LSU's
33
1 corporate structure because there's no evidence he did something
2 he wasn't authorized to do. I don't see an act that's wrongful
3 by independent legal standard. I recommend granting the motion
4 as to the sixth cause of action for interference with prospective
5 economic advantage.
6 "The seventh cause of action for inducing breach of
7 contract is based on the theory that PUC, NAD, Blackmer, Jackson,
8 and Graham met with Wisbey, LSU's president, and, quote,
9 'persuaded him,' end quote (sic), that it would be to LSU's
10 advantage to sever its ties to plaintiffs." That's Third Amended
11 Complaint, paragraph 167. "As pled, this cause of action falls
12 squarely under the common interest privilege because it seeks to
13 hold defendants liable for what they said out of concern about
14 the recording and plaintiffs' continued employment. I recommend
15 finding the seventh cause of action to be barred by the common
16 interest privilege.
17 "The eighth cause of action for intentional infliction
18 of emotional distress is alleged against all defendants and
19 alleges they engaged in outrageous behavior by publishing the
20 recording and using it to fire or threaten to fire plaintiffs.
21 Again, the Third Amended Complaint, at least in part, attempts to
22 create liability based on what they said. Any such claim is
23 barred by the common interest privilege. To the extent to which
24 the plaintiffs also allege defendants acted outrageously by
25 discharging them, as separate from talking about them, they have
26 to show that this action was, quote, 'extreme and outrageous,'
27 end quote." Cite: Alcorn versus Anbro Engineering, Inc., 1970,
28 2 Cal.3d 493, at 497, 498. "I have a hard time seeing how
34
1 plaintiffs meet this definition because, as set forth above,
2 they've presented no reason why Graham was prohibited from asking
3 them to resign. It is also extremely hard for me to divorce the
4 act of demanding resignations from the context of a discussion
5 about the propriety of allowing plaintiffs to continue in their
6 positions at LSU despite their divergence with the church about
7 evolution and the acts either committed in or admitted to in the
8 recording. There's also substantial overlap here with the First
9 Amendment defense I discuss below. Because there's enough of a
10 connection between what was done and concern for the church to
11 justify applying the common interest privilege to what the
12 defendants said, I have a hard time saying that any of what they
13 did qualifies as extreme and outrageous. I recommend granting
14 the motion as to the intentional infliction of emotional distress
15 claim, whether because of the common interest privilege or the
16 First Amendment doctrines discussed below.
17 "Finally, the ninth cause of action is for breach of
18 fiduciary duty against Graham solely. Plaintiffs allege he
19 committed this tort by ignoring LSU's structure and disciplinary
20 guidelines and allowing his conflict of interest to cloud his
21 judgment about what was good for LSU, as opposed to what was good
22 for the church. Plaintiffs make much of the fact that LSU is a
23 religious corporation that's separate from NAD and PUC, but they
24 ignore that the bylaws say that LSU is, quote, 'operated by its
25 board of trustees as an integral part of the PUC,' and that the
26 trustees are required to, quote, 'guide the university wisely in
27 fulfilling its mission in higher education in the context of the
28 educational, occupational, moral, spiritual, and social needs and
35
1 challenges of the Seventh-day Adventist Church,' end quote, and
2 to carry out their duties 'consistent with the policies of the
3 PUC.'" And that's PUC and NAD Exhibit Number 2, paragraph 6.9,
4 6.9w, page 22, 23 of electronic copy. "In addition, officers of
5 PUC and other church organizations are required to be LSU board
6 members." Again, ibid., at page 6 -- I'm sorry -- ibid.,
7 paragraph 6.2, page 21 of electronic copy. And Madam Reporter,
8 I'll give you this when I finish. "Finally, plaintiffs don't
9 dispute that Blackmer's duties include acting as advisor to
10 Seventh-day Adventist universities in North America, including
11 LSU." And that's response to PUC and NAD's separate statement,
12 Fact Number 29. "I again see no acts by Graham that actually
13 exceed his powers and responsibilities as the chair of LSU's
14 board. I recommend granting the motion as to the ninth cause of
15 action.
16 "If the Court agrees with the above analysis, then no
17 claims remain against NAD, PUC, Graham, Blackmer, and Jackson.
18 This renders moot the individual defendants' attacks on the
19 request for punitive damages because there are no surviving
20 causes of action to support an award of such damages."
21 And she goes on to discuss number two. And again, I
22 want to thank you personally, Ms. Orzel.
23 Let me read. "With the exception of the eighth cause
24 of action for intentional infliction of emotional distress, which
25 is alleged against all defendants, none of the above-discussed
26 causes of action is alleged against LSU. I recommend granting
27 its motion as to the intentional infliction of emotional distress
28 claim for the reasons stated above (i.e., I don't see any conduct
36
1 that qualifies as extreme and outrageous and, as described below,
2 the Court lacks jurisdiction over any inquiry into whether the
3 defendant -- the individual defendants stated concerns about the
4 recording were sincere.)
5 "The causes of action against LSU are the first four,
6 for breaches of express or implied contract, constructive breach
7 of employment contract, and breach of implied covenant of good
8 faith and fair dealing. Plaintiffs' main opposition to the First
9 Amendment argument is that LSU is not a church or, because it's
10 organized separately, a church-run school. They also complain
11 that the motions improperly ask the Court to revisit its ruling
12 on demurrer, but this is a speaking motion on which the Court can
13 look at extrinsic evidence. The work-up on the demurrer was
14 quite clear that the Court might need to look beyond the
15 pleadings to decide the First Amendment issue, such that
16 resolution needed to wait for a later date.
17 "First, it's important to note that, as the replies
18 argue, this is not about what's known as the ministerial
19 exception. The lead case on that doctrine is now Hosanna,
20 H-o-s-a-n-n-a, dash, Tabor Evangelical Lutheran Church & School
21 versus Equal Employment Opportunity Commission, 2012, 132
22 S.Ct.Rptr. (sic) 694, in which the Court held that the exception
23 operates as an affirmative defense in favor of religious
24 employers sued under employment discrimination laws. (Ibid., see
25 page 699, found at 705-706; see also Henry versus Red Hill
26 Evangelical Lutheran Church of Tustin, 2001, 201 Cal.App.4th
27 1041, at 1049, 1050 [exception to the Fair Employment and Housing
28 Act, in parentheses, (FEHA)]. And then there's Parker-Bigback
37
1 versus St. Labre, L-a-b-r-e, School, 2003. That's 301 MT 16, at
2 20 [exception to state law prohibiting discrimination in
3 employment].) Here, there are no statutory employment claims.
4 Instead, plaintiffs ground their causes of action against LSU in
5 contract and the implied covenant of good faith and fair dealing.
6 Hosanna-Tabor, supra, explicitly held that it was 'expressing no
7 view on whether the exception bars other types of suits,
8 including actions by employees alleging breach of contract or
9 tortious conduct by their religious employers.'" And that's 132
10 S.Ct.Rptr. (sic) at 710. "I've found no authority indicating
11 that the ministerial exception is the only framework for
12 analyzing claims -- for analyzing claims based on that -- I'm
13 sorry -- claims nonstatutory, based on employment.
14 "What is at stake here, and where I found authority, is
15 the extent to which the Court has the power to decide questions
16 relating to church doctrine. Even some of the statutory
17 employment cases provide insight into this more global question.
18 For example, in Equal Employment Opportunity Commission versus
19 Mississippi College, 5th Cir. 1980, 626 Fed.2d 477, the Court
20 considered whether Section 702 of Title 7, which makes the
21 statutory scheme inapplicable to certain religious employers,
22 prevented enforcement of a subpoena in an action brought by the
23 Equal Employment Opportunity Commission" -- that's the EEOC --
24 "after it received allegations that a college owned and operated
25 by the Baptist 'Convention' had a practice of discriminating
26 against African-Americans and women in employment." That's 626
27 Fed.2d at 484. "The college argued it had refused to grant
28 full-time employment to particular female employee -- to a
38
1 particular female employee not because she was female, but
2 because she wasn't a Baptist, and that the Court lacked
3 jurisdiction to say the school couldn't enforce a policy of
4 preferring Baptists in hiring decisions. The Court wrote:
5 "'We conclude that if a religious institution of the
6 kind described in s 702 presents convincing evidence that the
7 challenged employment practice resulted from discrimination on
8 the basis of religion, s 702 deprives the EEOC of jurisdiction to
9 investigate further to determine whether the religious
10 discrimination was a pretext for some other form of
11 discrimination. This interpretation of s 702 is required to
12 avoid the conflicts that would result between rights guaranteed
13 by the religion clauses of the First Amendment and the EEOC's
14 exercise of jurisdiction over religious educational
15 institutions." And it's ibid., at 486. "In other words, not
16 even allegations of pretext will evade the jurisdictional bar the
17 First Amendment poses when it applies.
18 "Plaintiffs' opposition relies exclusively on
19 Mississippi College and Winbery versus Louisiana College,
20 3d. Cir. 2013, 124 So.3d 1212, in both of which the Court found
21 that the sectarian nature of the schools that employed the
22 plaintiffs meant that some portion of the First Amendment
23 defenses asserted there fail. (Mississippi College, supra,
24 626 Fed.2d, at pages 486, 488; Winbery, supra, page 1215 at 1218
25 (sic).) Oddly, Mississippi College performs this analysis under
26 the establishment clause, while Winbery does so under the free
27 exercise clause, but this particular type of confusion isn't
28 unusual.
39
1 "What plaintiffs omit, and what the replies point out,
2 is that both Winbery and Mississippi College actually support
3 application of the First Amendment defense in this case.
4 Mississippi College arises in an odd context because it's really
5 a discovery dispute. The opinion's disposition was an order of
6 remand to the District Court for determination of, among other
7 things, whether the part-time teacher had been refused the
8 full-time position because she wasn't a Baptist. If so, the
9 Court agreed that Section 702 of Title 7 would apply and the
10 Court would lack jurisdiction." That's 626 Fed.2d, at page 486,
11 489. "An elucidating footnote offers a hypothetical and
12 indicates that it would be permissible for the college's practice
13 of preferring Baptists to disparately" -- I read this part, and I
14 think the point was that if the college essentially only
15 recruited at white Baptist schools to avoid hiring blacks, there
16 might still be a litigation. But if, essentially, they fairly go
17 to all Baptist schools and hire just Baptists, it then would be
18 outside the jurisdiction of Section 702. But I'll continue:
19 "Even though Section 702 and Title 7 aren't at issue here, the
20 same reasoning underlying the above analysis applies here. It's
21 very much worth noting that the Court reached these conclusions
22 despite the fact that it emphatically found that the college was
23 sectarian.
24 "Similarly, in Winbery, supra, the Court held that
25 while the free exercise clause of the First Amendment poses no
26 bar to jurisdiction, the establishment clause did. The
27 plaintiffs there alleged causes of action for defamation and
28 breach of a settlement agreement that was executed in an earlier
40
1 lawsuit they filed against their university employer." That's
2 124 So.3d, at 1213. "It's interesting that the free exercise
3 claim was that the ministerial exception barred jurisdiction
4 because the teachers qualified as, quote, 'ministers,' end quote,
5 within the church. This cuts against my earlier recommendation
6 that this exception only applies to statutory employment claims.
7 But given the reply's assertions that the defendants here aren't
8 arguing the ministerial exception, this wrinkle is immaterial.
9 What's helpful from Winbery is its discussion of the entanglement
10 doctrine, which, quote, 'provides that a court must decline
11 jurisdiction over a lawsuit when the dispute is so intertwined
12 with matters of religion that a proper resolution cannot be made
13 without interpreting or choosing between competing religious
14 principles or doctrines,'" ibid., at 1218. "The Court then
15 rejected the plaintiffs' claims that the case could be resolved
16 according to 'neutral principles of law without excessive
17 entanglements,' end quote. This was because, quote, 'to
18 determine whether the accusations that professors were teaching
19 errant views, the Court would have to 'delve deeply into the
20 Baptist theology,' and the other causes of action would require a
21 similar analysis of church doctrine.
22 "California law is in accord, and California courts
23 emphasize that, quote, 'Civil courts cannot interfere in disputes
24 relating to religious doctrine, practice, faith, ecclesiastical
25 rule, discipline, custom, law, or polity.'" And that's New
26 versus Kroeger, 167 Cal.App.4th 800, at 815. "This deference to
27 churches is at its height when the church is considered, quote,
28 'hierarchical,' end quote, or, quote, 'one in which individual
41
1 churches are organized as a body with other churches having
2 similar faith and doctrines, and a common ruling convocation or
3 ecclesiastical head,' end quote, 'vested with ultimate
4 ecclesiastical authority over individual congregations and
5 members of the entire organized church,' end quote. Here,
6 plaintiffs don't really dispute that the SDA is a hierarchical
7 church (see the responses to LSU's separate statement, Fact
8 Numbers 3 and 4.) They do complain that LSU isn't like other
9 educational institutions the SDA Church runs. But, as above,
10 they ignore the bylaws requiring LSU's adherence to SDA tenets.
11 Therefore, it looks to me like the SDA, as a hierarchical church,
12 is entitled to the utmost deference when it comes to selecting
13 who represents the church publicly, whether at SDA schools or
14 otherwise.
15 "Kroeger, supra, is particularly instructive as
16 described below. There, after a group of dissidents purported to
17 resign their memberships and join a different church, loyalist
18 members of an Episcopalian Church filed a complaint under the
19 Corporations Code Section 9418 seeking a declaration that they
20 were, quote, 'the true and lawful directors,' end quote, of the
21 parish in which the dispute arose. The Court held that it could
22 apply neutral principles of corporations law to decide whether
23 the dissidents had properly resigned from the church. However,
24 the Court then held that it must, quote, 'defer to the acts of
25 the representatives of the Episcopal Church in determining who
26 were the true members of the church, and, under canon law, who
27 were the lawful directors of the parish corporation." And that's
28 ibid., at 827. "This is because:
42
1 "Quote, 'Ecclesiastical decisions are not reviewable by
2 the secular courts ... Where the subject matter of a dispute is
3 purely ecclesiastical in its character, a matter which concerns
4 church discipline or the conformity of its members to the
5 standard of morals required of them, the decision of the church
6 tribunal will not be interfered with by the secular courts either
7 by reviewing their acts or by directing them to proceed in a
8 certain manner, or, in fact, to proceed at all.'" That's ibid.,
9 824.
10 "Similarly, plaintiffs here are asking the Court to
11 decide causes of action against LSU that necessarily require
12 delving into church doctrine. On the causes of action based in
13 contract, LSU" -- I'm sorry -- "plaintiffs argue LSU breached the
14 agreement by constructively discharging them before the end of an
15 express or implied term of employment. LSU responds that it had
16 grounds to terminate, if that's in fact what it did, because the
17 faculty handbook states that any faculty member could be
18 terminated for things such as 'neglect of responsibility' and
19 'flagrant and overt disharmony with or subversion of the
20 philosophy, objectives, and lifestyle expectations of the
21 university, as determined by the board of trustees and delineated
22 in its current mission statement.'" That's Exhibit 15 to motion,
23 paragraph 6.4(b), page 299 of electronic copy. "Plaintiffs don't
24 dispute that they agreed to such terms of employment and instead
25 contend they didn't violate any of these grounds." That's
26 response to LSU's separate statement, Fact Number 68. "The
27 problem with this approach is that, under the authorities cited
28 therein -- cited herein, the Court lacks jurisdiction to say
43
1 whether any violations of SDA tenets occurred on the recording,
2 or whether any such violations were flagrant and overt. Because
3 I see no way for the Court to adjudicate the causes of action for
4 breach of contract (and, therefore, the one for breach of the
5 implied covenant of good faith and fair dealing, which uses the
6 same arguments by plaintiffs) without having to decide questions
7 of church doctrine, I see no way for the Court to have
8 jurisdiction over these claims."
9 We're going to take about a ten-minute recess for the
10 court reporter. And then we'll resume again in ten minutes.
11 (Recess.)
12 THE COURT: I'll recall RIC1112557, Kaatz, Beach, and
13 Bradley versus Graham, et al. All the counsel are present.
14 I'll continue. And I'm almost done. As I've told
15 jurors when I read jury instructions, it's difficult to pay
16 attention even if you are potentially interested in and, unless
17 you had a photographic memory, remember everything that was said.
18 So I do apologize to some degree. Reading to people is probably
19 the most ineffective way of communicating. But this is -- I'm,
20 in a sense, making a record that I want to be clear, and I
21 couldn't say it any better. So just bear with me. I'm almost
22 done.
23 And I'll continue exactly where I left off: "It is
24 immaterial that plaintiffs weren't teaching religion. For
25 example, in Silo versus CHW Medical Foundation, 2002, 27 Cal.4th
26 1097, 1103, the Court reversed rulings allowing the claims of a
27 janitor at a Catholic-owned hospital for termination in violation
28 of public policy, even though his religious employer was exempt
44
1 from FEHA, to proceed. The termination occurred because the
2 janitor was -- had a practice of proselytizing at work even
3 though the hospital wanted to be open to people of all faiths."
4 Ibid., at 1101. "The Court wrote the following in response to
5 the argument that the plaintiff was just a janitor:
6 "'Silo's argument that he was merely a low-level
7 employee who did not help to shape CHWMF's religious message does
8 not assist him. CHWMF's problem was not that Silo failed to
9 properly perform a religious function that had been assigned to
10 him, but rather he was engaged in religious communications --
11 proselytizing and other forms of religious speech -- that the
12 employer neither authorized nor considered appropriate.'" Ibid.,
13 at 1108.
14 "Similarly, it seems here that the extent to which
15 plaintiffs actually taught religion or otherwise acted as
16 'ministers' is completely irrelevant, because even if they
17 didn't, the church is entitled to make its own decisions about
18 how to respond when employees of a church-run school are deemed
19 to have violated SDA doctrine.
20 "For all these reasons, I think the Court lacks
21 jurisdiction over the breach of contract and implied covenant
22 claims. The same analysis leads me to the same conclusion on the
23 intentional infliction of emotional distress" -- I'm sorry. "The
24 same analysis leads me to the same conclusion on the intentional
25 infliction of emotional distress claim, which is the only other
26 cause of action alleged against LSU. In order to find that LSU
27 or any defendant has acted in an extreme or outrageous manner,
28 the Court would have to find that church doctrine wasn't actually
45
1 violated, or that it -- or that it wasn't violated enough to
2 justify the defendants' collective reactions.
3 "All in all, then, I recommend granting all four
4 motions. This is an interesting case with an odd fact pattern,"
5 and she has little doubt that it will end up on appeal.
6 Now, as to the evidentiary rulings, "Plaintiffs made no
7 evidentiary objections except, occasionally, in their response to
8 defendants' separate statements. I recommend ignoring these
9 because they don't comply with California Rules of Court, Rules
10 3.1352 and 3.1354, which require a separate filing following a
11 particular format. Defendants did lodge objections, but it's all
12 to evidence I didn't use. The objections are, therefore, moot,
13 and I recommend overruling them," which I do.
14 As to joinder, "Blackmer, Jackson, and Graham all
15 purported to join each others' motions. Because I recommend
16 granting their motions on the merits, their joinders are needless
17 and irrelevant. They also fail procedurally" as -- "they also
18 fail as procedurally improper because they didn't file separate
19 statements or explain why the motions by the other parties apply
20 to them with equal force. This is reason to deny their attempt
21 to benefit from the work of a codefendant."
22 Now, it is true that in some of the motions -- and I
23 thank you for that -- rather than repeating them, they just
24 reference what was said before in terms of argument. That's not
25 the same thing as incorporation, and I did not think it as such.
26 Now, let me step back and speak from my larger
27 impressions of this case. First of all, I'm not a Seventh-day
28 Adventist. I think some of the specific beliefs, as part of
46
1 church doctrine, are not things that I believe in. I would think
2 that, in my personal view, evolution is probably taught in
3 biology and creationism is probably taught in a religious course.
4 I think, however, that the Seventh-day Adventist Church
5 does a great deal of good. They're obviously a positive force in
6 terms of their teaching and the values they teach. But there are
7 lots of churches similar to the Latter-day -- the -- I keep
8 saying Latter-day Saints because, again, I have the same feeling
9 about the Latter-day Saints. I think some of their beliefs are
10 kind of strange and I don't buy into them. But again, I think
11 they do good work and are a positive force, and the same for most
12 religions.
13 But again, the thing that's clear is people are
14 entitled to have their religions, practice their religions, allow
15 them to set up high schools, colleges, universities essentially
16 within the guidelines of what's expected to be taught by the
17 university. And again, what I gather from these entanglement
18 cases is that if you are dealing with a religious institution and
19 issues that significantly deal with both religious doctrine and
20 morality, a religious morality, unless the Court absolutely has
21 to, the Court should stay out of it.
22 Now, obviously, even in some of the cases that talk
23 about entanglement, which includes the Serbian Eastern Orthodox
24 Diocese, et cetera, versus Milivojevich, spelled
25 M-i-l-i-v-o-j-e-v-i-c-h, which was cited by someone at 426,
26 712 -- 707, rather, clearly, the Court found entanglement issues.
27 But in order to decide who has the property, they had to make a
28 decision about that, and they made the decision. So again, I
47
1 think what -- the rule I gather is that if you can't avoid it,
2 like there's a piece of property and they're going to essentially
3 go to war and squat on the property, the Court has no choice, it
4 will enter into it, but will do everything it can to avoid
5 participating in discussions about doctrine or making unnecessary
6 decisions which seems, to me, clear, in this case.
7 I think that New versus Kroeger, 167 Cal.App.4th 800,
8 probably is the case that's most significant and closest on this
9 case. That case does say specifically that -- at Headnote 9 at
10 page 820 -- that the fact that you have religious corporations --
11 and I suspect that you have separate corporations that are
12 interrelated for liability issues, it's like having a wholly-
13 owned corporation. People are allowed to set up corporations to
14 protect liability and protect their assets, and so segmentize
15 liability. So if something happens in one branch of the church,
16 all the rest of it doesn't have to fall. As it is with corporate
17 law, religions get the benefit of that.
18 But I don't think that fact and the fact that LSU is
19 set up separately changes the fact that you all operate under the
20 auspices of the Seventh-day Adventist Church, that the values
21 that are subscribed to and set forth are expected to be shared
22 by, enforced, and guide the activities of not just the ministers,
23 but the people who go to the parishes, the people who teach in
24 the schools, and so forth.
25 And it just seems to me that the discussions that are
26 on this tape and what happened afterwards are so intertwined with
27 issues relating to church doctrine, but even less than that, more
28 involved with church morality that the church has to decide on
48
1 its own how it's going to handle these things. And I think this
2 Court is becoming unnecessarily entangled by being forced to
3 participate in this process.
4 So that's my general thought in that regard. I have a
5 couple more points I want to make. The overview of the trustees'
6 responsibility -- this is the overriding responsibility of a
7 trustee, including Mr. Graham -- includes defend the university
8 from influences that interfere with achieving its mission,
9 safeguard the principles of moral integrity and academic freedom
10 for the community of scholars.
11 Moral integrity. That, I think, is so critical that
12 you would be hard-pressed to suggest that Mr. Graham did not have
13 a right to act in a way he thought fit in contacting these three
14 gentlemen. And again, as pointed out, he could not accept a
15 resignation. He could not fire these people. But he could
16 certainly make the initial contact, under the color of what he
17 thought was the right thing to do, and present it to the board,
18 on which they then acted.
19 Now, I agree that as to the three defendants, it's a
20 little bit different because one defendant was the dean of the
21 school, there was another person that held a substantial
22 administrative position, and there was Mr. Bradley who, I think,
23 had a part-time contract. I would suspect -- the gentlemen --
24 the three gentlemen had been with the university for 100 years
25 combined -- that Mr. Bradley was probably retired and working on
26 a part-time contract.
27 According to the bylaws, that appears that that should
28 have been done in conjunction with the president of the
49
1 university. But it seems to me that's under that Section B that
2 I talked about, where the board can directly deal with the
3 president of the university and the people of the administration,
4 which, I think, would take care of Mr. Kaatz and Mr. Beach
5 directly. But it seems to me that the overlying privileges to
6 what the university's all about is the kind of thing that
7 Mr. Graham was justified in doing.
8 Now, let me go through what we're really talking about
9 here, because everyone is just soft-shoeing it. That tape
10 recording, a transcript of which is included as Exhibit 4 in the
11 separately bound volume of evidence which is attached and filed
12 on November 27th, is remarkable. You know, it's kind of
13 remarkably tolerant of the university that all they wanted of
14 Mr. Kaatz and Mr. Beach is to remove them from the leadership
15 positions, and go ahead and resume their teaching positions. It
16 seems to me that had they wanted to, and they had been a truly
17 malicious -- not malicious, but had been a truly vindictive
18 organization, they would have cut their ties with them
19 altogether.
20 I had a brief discussion with the research attorney.
21 And the question is, who really breached the contract? Did the
22 university breach the contract by firing Mr. Kaatz, Mr. Beach,
23 and Mr. Bradley? Or did Mr. Kaatz, Beach, and Bradley breach the
24 contract by violating the morals clause with this recording? And
25 again, for some reason, the plaintiffs blame the university for
26 disseminating the recording. And I don't understand the nature
27 of that claim at all.
28 Mr. Darnell, who, essentially, I think, is an ally with
50
1 these three gentlemen -- at least it sounds that way on the
2 tape -- surreptitiously and proper -- probably improperly
3 recorded the conversations with Mr. Jackson and Mr. Blackmer.
4 Then he leaves his phone on and records the conversation between
5 the three gentlemen and himself at Mr. Beach's house, then sends
6 the recording for, I would assume, reasons that he thought would
7 benefit he and the people pursuing that particular position, to
8 the Spectrum, which I gather is a nonchurch-controlled
9 organization, but run by Seventh-day Adventist, to point out what
10 exactly they feel they're forced to do. Because I get the clear
11 impression here that these gentlemen thought that they were being
12 unfairly evaluated and that the deviations were being found
13 against them which, I guess, would have some impact upon their
14 accreditation and so forth.
15 So I suspect they were using the Spectrum as a forum to
16 either put pressure or to stop this from happening. That's the
17 only logical conclusion I can come to. It's not really
18 significant or not. But when you send this recording to Spectrum
19 on a website that's now open to the public, and, now, that way,
20 Mr. Blackmer and Mr. Jackson get ahold of it and then pass it on
21 to Mr. Graham, there's no right to privacy, and there's nothing
22 that Mr. Blackmer or Mr. Jackson have done wrong.
23 Also, by -- seeking the resignation of these gentlemen
24 and perhaps limiting the -- the dissemination of this tape
25 recording, arguably, is also a fair request. Now, I don't know
26 what caused Mr. Beach, Mr. Kaatz, and Mr. Bradley to decide they
27 didn't all want to go that route and eventually file a lawsuit.
28 But now this recording is before God and country.
51
1 And if half of this is true -- and let me go through
2 it. I'm going to spend a little bit of time going through what's
3 on this tape recording. If half of it's true, it's just really
4 bad.
5 Now -- and I say that knowing that all of us, to some
6 degree or the other, are hypocrites. There's probably relatively
7 few true saints that are not hypocrites in some sense. And I
8 suspect, myself included, I have said things with friends that I
9 would -- have regretted saying, I have no justification for
10 saying, and I could be criticized for doing so. I understand
11 that. But once it's made public, and once I have done it, I can
12 do nothing other than apologize and accept responsibility for
13 what I did. That's what happened. That's what I did.
14 And when you deal with it, with people in a religious
15 context, it's generally looked at as even more problematic and
16 worse. It's like a police officer violating the law. We have a
17 position of trust. And the position they take is such that we
18 really do have a higher expectation because, remember, they're
19 speaking from the voice of God, and they're telling people they
20 will go to heaven or hell based upon what they say. So you
21 expect the messenger to be -- also have the integrity when they
22 speak. That's why we're so upset with Jimmy Swaggart and his
23 prostitute. There was a major megachurch, where the minister was
24 drinking in hot tubs, naked, with women. We have the problem
25 with priests in the Catholic Church. And on and on it goes.
26 That's why we're so offended by Popes, in the past, that would
27 have children. You preach one thing and you do something
28 different. The hypocrisy becomes so obvious that you would think
52
1 people would be offended and the image of the church, which is
2 important to churches, would be adversely affected.
3 Now, the first part of the conversation, at page 30,
4 again talks about the theological difference and the problems
5 with the biology curriculum and the religious curriculum, and,
6 apparently, there's a reference to Webster. I guess, Webster is
7 ripe and long-winded. And I appreciate that, kind of like me.
8 But at any rate, I guess, he's a religious teacher and they're
9 saying that maybe creationism should be taught there. But
10 there's a whole discussion here that talks about church theology
11 that is significant and underscores the entanglement issues.
12 But then you go to page 31, or page 2 of the
13 transcript. And there's a word by someone. Now, I get the
14 feeling that the individual plaintiffs feel that if they didn't
15 say it, they're not responsible for it. But that's not the law
16 of adoptive admissions. Not -- that's not the part of being part
17 of a conversation, where you're laughing about things and not
18 voicing disagreements about -- but this is what -- the kind of
19 thing that's said:
20 "Yeah. The whole front end was just blow smoke up your
21 skirt. And then, once they had broken and got back together,
22 they actually started answering questions, but still nothing that
23 gives me -- oh, and the other thing Jackson just basically said,
24 quote, 'I'm a eunuch,' end quote.
25 "Yep.
26 "And he said it over and over again. And Blackmer
27 wouldn't admit to being a eunuch, because he's a bully.
28 "Yep.
53
1 "But he's just a eunuch bully.
2 "Blackmer never came out -- never -- Ginger's
3 question -- no Kendra's -- "
4 Then it goes on and says, "Well, I think when he talks
5 through the other side his mouth, he gets credit that way.
6 "Yeah, I saw a line that said, you know, there's two
7 things that I dislike about you -- your face.
8 "(Laughter.)
9 "It drove Randal crazy that I was sitting up top.
10 "Good."
11 Then we go to page 33: "But Pawluk -- I asked Pawluk,
12 quote, 'Were you there when that was going on?' And he said,
13 'Yes. Everything she said was right on. That is exactly
14 right.'"
15 "Voice four: Hum, I didn't see her, but her voice
16 sounded very weak. Is there something going on with her?
17 "Ginger?
18 "Ginger.
19 "There is always something is going on with her.
20 "I mean, is she physically sound or --
21 "She's always got --
22 "She's never been --
23 "Oh, she hasn't? Oh, I don't know.
24 "No.
25 "She is very imaginative.
26 "She's not. I don't think she -- she has lupus.
27 "Okay.
28 "And now you don't know how much of it is her lupus
54
1 flaring up and how much of it is she is using as an excuse to,
2 uh -- the guys in religion say, you know, she never uses it as an
3 excuse with them, so it's not a Florence Mon" -- I don't know the
4 spelling -- "Robertson syndrome.
5 "(Laughter.)
6 "She's got a lot better at hiding whatever it is.
7 "I'll drink to that.
8 "Oh, okay.
9 "I got away with it."
10 And then we go on to say -- I mean -- I mean, it's
11 not -- it doesn't -- not going to take much of a trial lawyer to
12 present this to the jury and talk about the fact that people are
13 commenting upon a disability and a disease that a person has.
14 And that doesn't look good. At least, it doesn't to me. But I
15 may be an outlier here.
16 Then we go on. "Voice four: Well, you know, you have
17 got -- you have to study your enemy. Yeah, I learned Blackmer
18 will speak out of every side of his mouth that he can and that
19 Jackson's a sheep. He's a eunuch. There's nothing he's going to
20 do except spread peace and love. He was given plenty of
21 opportunity. He says, quote, 'Well, we have no control over the
22 review,' end quote. But he was given plenty of opportunity to
23 say, 'Well, are you going to speak out against what they did?'
24 And the answer is, 'No.' Because -- just because one Adventist
25 institution criticizes another doesn't mean we should criticize
26 the one that criticized the criticizer.
27 "Yeah. Bullshit.
28 "And then -- and if only when Kendra talked -- not Ken.
55
1 Uh, no. Uh, the other one.
2 "Ginger?"
3 Number four: "Ginger talked. And he had to answer
4 her. It was the only time that I almost stood up and said
5 something. And I wanted to say, 'This sounds like Catholics with
6 their priests.'
7 "(Laughter.)
8 "Because, you know, he's talking about how we don't
9 confront and all of this, yeah. But you move people around who
10 are known abusers. They may not be abusing the way priests do,
11 but they are ruining just as many lives, just as thoroughly.
12 "I wish I would have recorded the first half.
13 "I have the whole thing recorded, but I don't know how
14 well."
15 Then we go on to say, at the next page, 35, "Well, he
16 said he's -- he said, he said he need a spanking.
17 "Voice: He should be hauled in and spanked. Spanked
18 is what he meant, but --
19 "Oh.
20 "Yeah, he said spanked. He said the same thing about
21 the Michigan Conference.
22 "But he said, 'If there's a problem, you don't have to
23 work out with the Michigan Conference.
24 "No. He said that when he saw what Asherick did, as
25 president of the Canadian Union, he said that guy should be
26 hauled in and spanked. When I (sic) saw what the Michigan
27 Conference did, while he was president of the Canadian Union, he
28 said, 'They should be hauled in and spanked.'"
56
1 Then you go to the next page, page 36: "And he
2 adamantly says, Blackmer did, that Ted Wilson" -- I think who is
3 the chairman of the general counsel -- "had nothing to do with --
4 no influence over the AAA's decision." And, for the record, I
5 think the AAA is a accrediting body, and there was a dispute
6 going on relating to problems with the accreditation of LSU.
7 "Answer (sic): Bullshit.
8 "No, he said -- over the inclusion of the word
9 'deviation.' And he didn't say Ted Wilson had nothing to do with
10 it. He said Ted Wilson was not responsible for the final edit
11 where it appeared. So let's get the language right. It doesn't
12 mean that Wilson didn't call the guy that had the responsibility
13 for the final edit."
14 And then they go on to say, that man is dangerous, he's
15 a bad man.
16 "Voice: Blackmer?
17 "Yeah."
18 Again, disputes over doctrine, over deviation, over
19 issues relating to accreditation just runs through this entire
20 conversation.
21 All right. Then we go to the next page. Again, "I
22 wish Pawluk had said that at the -- to those guys. Blackmer
23 speaks very well out of both sides of his mouth, though, I do
24 have to admit. This guy was -- the man I saw in the first
25 90 minutes was a completely different person than the one I saw
26 in the closed-session board meeting.
27 "Wow.
28 "If I hadn't seen the one in the closed-session board
57
1 meeting, I would have thought, 'Oh, this guy's reasonable, he
2 gets it. He understands the issues.'
3 "Yeah, because I was sitting there thinking, you know,
4 this guy sure sounds more reasonable than the stories out there.
5 "Unbelievable. It was only at the very end that he let
6 out that he thought that, um -- that, in his view, the faith had
7 to be in every class, and that specific.
8 "He said that over and over again, you know, to others,
9 you know.
10 "Huh?
11 "He's one of those guys who says, 'Every class should
12 be" -- and then there's 'inaudible.'
13 "Well, their -- well, were you guys there when he said,
14 quote, 'We're not a university to teach excellent academics'?
15 "We already have a Harvard.
16 "Yeah. We're not a university to teach Jesus. There's
17 Baptists and those things that can teach Jesus. We're a
18 university to teach the uniquely Seventh-day Adventist message.
19 "Voice three: He said that in the back?
20 "Yeah. He said, 'We have no reason to exist if we're
21 not teaching a uniquely Seventh-day Adventist message.' He said,
22 'We, as a North American Division, put $28 million a year into
23 our educational system. And if we wanted our kids to have just a
24 Christian education or just a good education, we'd send them
25 somewhere else.
26 "Voice three: I'll drink to that.
27 "(Whistling.)
28 "But they don't want us to be a bible college?
58
1 "Well, that's how you speak out of both sides of your
2 mouth. You say things that -- but his true colors are there.
3 Are you going to the Calgary or Alberta or whatever this thing
4 is?
5 "Banff."
6 Now, then they go on to talk about -- apparently, Banff
7 is a meeting where, I guess, a number of Seventh-day Adventists
8 are getting together. And this is what they say in this
9 conversation.
10 This is voice four: "In Banff, get your ... hiking
11 boots, stay the weekend" -- I'll be done in just a minute -- "on
12 either side.
13 "Oh, yeah. I'm an old fart, man. I don't do that much
14 hiking anymore.
15 "Voice four: Oh, yeah. But, I mean, you don't have to
16 hike.
17 "Victim (sic) one: I'd like to go up there and look
18 around.
19 "Voice two: Oh, sure.
20 "Voice one: But you've got a whole bunch of Adventists
21 floating around. How are you going to go in and have a good
22 steak and a good bottle of wine?
23 "Voice four: No, that's why you have to stay the
24 weekend before and after.
25 "(Laughter.)
26 "Oh, week after. Oh, I missed it.
27 "(All laughing.)
28 "Oh, yeah. Bummer.
59
1 "(All laughing.)
2 "Oh, brother."
3 Now, that's pretty bad. And we'll leave on that low
4 note, and we'll come back at 1:30.
5 (Noon Recess.)
6 THE COURT: All right. I'll recall RIC1112557, Kaatz,
7 Beach, and Bradley versus Graham, et al. This is the hearing on
8 the motion for summary judgment, and I'm going to continue my
9 comments.
10 And again, I'm at page 38 of the Exhibit Number 4 -- or
11 Number 9. And it says -- I guess I'm on page 40 now. I'm sorry.
12 And this is towards the top. "He says, 'It's not about who
13 teaches what in what class. It's not even about what they
14 believe after they leave. It's a more fundamental issue than
15 that, and it's an issue that's in the church and in the
16 definition of our identity as a church. Until you guys solve
17 that, you're never going to solve it on the university campus.'
18 And it went from there. So his question was actually a
19 ten-minute lecture followed by, quote, 'What do you think of what
20 I said?'
21 "(Laughter.)
22 "But the reality is --
23 "Voice number three: He's got that funky hairdo.
24 " -- you know" -- next voice. " -- you know the
25 evidence is on -- is in on most of this evolution stuff. You can
26 part it the way you want, but the (sic) evidence is in. You
27 better figure out how you're going to take Genesis I and preserve
28 the creating savior."
60
1 And so there's more discussions that I think directly
2 impact the theological underpinnings of the church.
3 Then you go to the next page, page 41. And it says:
4 "(Laughter) (Opening the bottles and pouring drinks.)
5 "I like that one a lot.
6 "Voice: I would not -- he doesn't mind the liquor.
7 He's just anti-a forte and anti-sinfulism -- sinfulism and all of
8 that. I haven't paid much attention to the review and what they
9 had done. And I did not realize how much anger and hurt and
10 animosity that review article created on campus. That -- "
11 And then next voice: "Because they basically told the
12 Educate Truth line.
13 "Yep.
14 "Yep."
15 Then it goes on to say, "You even had the mic at one
16 point. Were you going to say something?
17 "Voice: Oh, my goodness.
18 "Well, John Webster finished and gave it to me. I
19 don't know why.
20 "Oh, I see.
21 "(Laughter.)
22 "I know if I -- I sort of didn't know what happened
23 before because I was gone for a while. But my request would have
24 been, you know, Larry, what you said, you don't agree with the
25 word 'deviation'? Are you willing to send an e-mail at least to
26 all the members -- all the employees of the North American
27 Division saying that it was unfortunate wording, what you put in
28 there by mistake, you know?
61
1 "Right. Right."
2 So again, more discussions about theological --
3 potentially theological issues.
4 Then at page 42, "Voice: And see, if I could
5 communicate one thing to those idiots at the church hierarchy, it
6 would be that I've watched for decades the traditional position.
7 Tell kids that science has nothing to it and they go find out
8 what the science is and they're blown away. We present the
9 evidence (sic) in a context that is far more faith-affirming and
10 they're not going to get blown away. Okay? This works better
11 for" -- I think it was clarified by Mr. Bradley, but the word was
12 for "conning" the kids into just staying Adventist.
13 But, again -- then on the next page, "I wish -- I wish
14 Wisbey had the guts. Wisbey didn't want Blackmer there. His
15 protest to do that was that his communication with Jackson was
16 all fine, but not to mention Blackmer or anything, but simply to
17 copy him on all communications with Jackson, he said, if that
18 accomplished anything (sic).
19 "Well, Wisbey -- Wisbey didn't want Blackmer here
20 today?
21 "Yeah. And so I said, 'Well, why didn't you say to
22 Jackson you don't want Blackmer on this campus again?' But he
23 couldn't pull his bull -- his balls out of his belt pocket to do
24 either. So Wisbey was, uh, if he didn't get more
25 (unintelligible) than he throws -- "
26 Then you go on to the page number 44. "Well, I (sic)
27 asked those guys to do it. But the way Pawluk" -- and that's
28 spelled P-a-w-l-u-k in this transcript -- "phrased it to me -- he
62
1 was going to make a statement that said, 'We're not going to mess
2 with this anymore. We're not going to reply to e-mails. We're
3 going to get -- we're going to get about to go about (sic)
4 business of becoming a better university, and we're not -- we're
5 not -- we're not engaging in this until the board comes in,'
6 which is fine, except the reality is if somebody is shitting on
7 your head you at least have to wipe it off.
8 "(Laughing loudly.) Yeah, wipe it off.
9 "So --
10 "Let me ask you a question. Both Jackson and Blackmer
11 made the question -- made the statement tonight that that open
12 letter is the best thing La Sierra could have done. That
13 would -- would have happened if we hadn't done what -- done that
14 would have been much worse. Now, to me, much worse means being
15 put on probation. Um, Blackmer said that in so many words."
16 So again, I think this is a discussion about the
17 credibility that I mentioned earlier.
18 Then you go on, to the next page. "Yeah, Bobby Brown
19 made a good statement at the end, too, about you know -- they
20 need to make a statement about that word was not appropriate in
21 there. And if that's what they believe -- it's basically saying
22 if they have any balls, if they (sic) had any ethics, they would
23 make a statement. All right? I'm hoping Jackson will say
24 something and let Blackmer fight that out with him, but I almost
25 think we could probably co-opt Jackson, but maybe not.
26 "Answer (sic): He's got no power."
27 Then you go on to this discussion, which gives you some
28 idea that contrary, I think, to the position the plaintiffs are
63
1 taking, that this is a totally separate university and that it
2 should be looked at independently, and that the North American
3 Division people nor the Pacific Union people have any business
4 getting themselves involved. This is what, I think, the
5 plaintiffs really see the situation as being, which is probably
6 closer to the truth.
7 "Right. And they -- part and parcel with that is they
8 want a North American educational system that is not conference-
9 and union-owned and run, but centrally owned and centrally
10 managed.
11 "Right.
12 "That worries me.
13 "So it's a double-edged sword.
14 "Yeah.
15 "I'd be happy to give them the accrediting. But this
16 is -- is the only issue that -- in any length that Jerry McIntosh
17 and I have disagreed on at length over ten years. He wants the
18 system and he wants the specialties built up so that we don't
19 have to duplicate efforts and all of that.
20 "That's bullshit.
21 "No, but I understand his point. I'm on the board of
22 La Sierra, and I'm not on a -- if somebody put me on a North
23 American Division national education think tank, I don't know
24 what I would think. But --
25 "No, we need a Brigham Young, but we don't have it. We
26 can't get there.
27 "Yeah.
28 "Well, if this is the --
64
1 "Voice: Ellen White University?
2 "This system thing that Jerry talks about and others
3 have talked about in the past, it doesn't make any sense. I
4 mean, you know, yeah, Walla Walla can have an engineering
5 program. And if it's right for the community they serve, they
6 should have it. But that shouldn't preclude us from having one
7 if it's right for our community. We need a system like UC, or
8 the -- Cal State has a system. Every one of these suckers
9 survives on its own. And it's only when you get two of them in a
10 room, friends or peers, they're cutting each other's throats.
11 Right?
12 "Right."
13 And then, it goes on to the next page, continuing on
14 that page: "Right.
15 "Right.
16 "But as soon as the kids say, 'Well, maybe I -- I'll go
17 to Michigan State or something,' then they're selling UC.
18 "They're selling UC, right.
19 "All right? So --
20 "Well, isn't that kind of what we do with the PUC?
21 "Well, but they're up front about it and we're not. I
22 mean, we're sitting in our own board meeting saying, 'What would
23 that do to the PUC?' I don't give a shit what it does to the
24 PUC, you know?
25 "Is that happening anymore?
26 "Oh, yeah. I mean, Wisbey fought these -- those three
27 culprits.
28 "Really?
65
1 "Really (sic). I mean, about PUC's survival?"
2 And on it goes about, again, governorship and all the
3 other issues involved.
4 All right. Then, page 49, there's a discussion about
5 the Spectrum: "I'm curious to see what Spectrum is doing. I
6 didn't realize they still published the magazine. I just look at
7 their blog -- you know, at their website and their blog, but
8 Blackmer talked over and over again about this comment -- about
9 his comments to Spectrum.
10 "So what? Because he says something different to
11 somebody else?
12 "I read his stuff, in a Inside Higher Ed. It wasn't
13 that good.
14 "Oh, he was real proud of that too.
15 "I know he was.
16 "Make a bad" -- then unintelligible -- "so important.
17 "Well, he's -- this guy's got an inflated view of his
18 own self-importance.
19 "Well, no, I agree that you have to be pretty special
20 to talk Inside Higher Ed.
21 "(All laughing.)
22 "Especially to talk about something and bullshit.
23 "Oh, the other thing Blackmer said -- he claimed --
24 what did he claim about -- there was something he claimed that he
25 took notes from the biology discussion, and then" -- something,
26 goes on. There's a discussion.
27 Then you go on page 51, this discussion again. This is
28 representative of some of the discussions that happen here.
66
1 "And, um, Trueblood said that to him. He says, 'I did, um, four
2 years of college, two years in masters, and six years in a Ph.D.
3 program.' He says, 'I can explain my biology stuff because I
4 know that stuff.' He says, 'As far as I -- as far as Genesis I,'
5 he says, 'I can tell my students what Belief Number 6 is, but if
6 you're looking for me to do an exegesis,' spelled
7 e-x-e-g-e-s-i-s, 'I'm not going to do that.'
8 "Precisely.
9 "And that's a reasonable position.
10 "And that's Greer's position. As screwed up as he
11 sometimes get (sic) when he's blowing off smoke, that's his
12 position. He does that. I mean, he does that in spades."
13 And then, page 52, "So Dan Jackson is basically another
14 Richard (sic) Graham.
15 "Yeah, yeah, he's a eunuch. It was the eunuch -- it
16 was the tale of the eunuch and the bully.
17 "Well, you know what they're -- what they say, being a
18 Richard (sic) Graham beats the hell out of being Ella.
19 "You know what? I would love to have experienced the
20 last two years under Tom Mostert rather than under Ricardo Graham
21 on this issue.
22 "Why?
23 "Because he would have -- I don't know whether he would
24 have taken the church's side or the university side, but if he
25 had taken the church's side, he would have -- we would have been
26 able to rise the board against him. And -- but I don't think he
27 would have -- I don't think he would -- I mean, if the later part
28 of his career, where he ... wasn't getting promoted again, he
67
1 would've stood up to them.
2 "I'll tell you what would have happened. He would have
3 kicked those ladies' butts.
4 "Yeah.
5 "He would have reamed their asses.
6 "Oh, yeah. He wouldn't stand for that.
7 "(Laughter.)
8 "Yeah, and Shereen would have made it past the first
9 interview -- and Shereen would have never made it past the first
10 interview. I mean, we would have never even known about that
11 issue. You know, whenever Warren or Larry would have come to him
12 and said, 'We're thinking about this,' and he would go 'No.' And
13 then I would've found out later that he had done that and been
14 pissed at him for acting on behalf of the board. But it still
15 wouldn't have mattered. And -- "
16 Then there's this discussion at page 54: "But Carla is
17 good buds with Louie Bishop's sisters or aunts or something.
18 "No, but Katie (sic) Proffitt --
19 "She's not even married.
20 "Well, she used to be. She got knocked up without
21 being married? I know her kid.
22 "Yeah, she's been married.
23 "If that's the case, I've never heard of it. But I
24 don't know if that would be a particular problem -- would be a
25 particular problem, would it be? Because why, unless their
26 relationship with each other was mater- -- well, maybe that's
27 what's being spread around.
28 "(Laughter.)
68
1 "Bumping fuzzies? Is that what you're saying?
2 "(Laughter.)
3 "You know, if you told me that about Kathy, I would not
4 be surprised at all.
5 "I don't know her.
6 "And you're just as well off.
7 "Well, I do have a choice (sic) that come the May board
8 meeting, Carla's going to have a hell of a choice.
9 "(Laughter.)"
10 Then there's this discussion at page 55: "Because
11 Suzanne Mallory has done an abominable job of it.
12 "Isn't it already going on right now?
13 "Yes, I'm going to step in as team leader.
14 "Oh, you're going to take it over?
15 "And I told Faith -- she took me to lunch today, and I
16 said, 'Anytime you take me to lunch [unintelligible] the axe is
17 coming.
18 "Who?
19 "Favorito.
20 "Oh.
21 "I know there's a hook in this --
22 "Fay Burrito. I like that.
23 "Fav.
24 "What does the word -- what does fay mean, f-a-y?
25 "No, no, fav.
26 "I -- no, I know. What does fay mean?
27 "Fay means gay.
28 "That's what I thought. So I called her the fay
69
1 burrito.
2 "(Laughter.)
3 "Right. It means the --
4 "No, but fay fay would be a prerogative (sic) for a
5 male and not a female.
6 "What about a piece of food? A fay burrito.
7 "(Laughter.)
8 "I thought you were saying Faye Swayze.
9 "(Laughter.)
10 "I'm sorry, I just -- a fay burrito.
11 "(Laughter.)
12 "That's one hell of a gay burrito.
13 "(Laughter.)
14 "A fay burrito.
15 "(Laughter.)
16 "Well, I don't think that affects you now --
17 "No, I told her, 'Listen, I will do this on two
18 conditions,' which I named. But I said, 'Come May, you may have
19 to find someone else.' 'No,' she said, 'We counted all the
20 votes. We think you have it,' which echoes what I heard you
21 saying indirectly.
22 "All right. Here's what fay means. It means a fairy.
23 "Exactly.
24 "No, that's not in a fairy as in a fairy --
25 "Yet, like, with little wings.
26 " -- in a small being form. Playful, having magical
27 powers.
28 "(Laughter.)
70
1 "Jeb. Jeb will tell you; right?
2 "A fairy, uh."
3 Then there's a discussion about somebody named Nate
4 Brandstater's father. And it goes like this: "Who? Bernard?
5 "Yeah.
6 "I knew him in Lebanon, but I've never known him as an
7 adult.
8 "Even his sister says he's screwy. (Laughs.)
9 "Really. Is he screwy?
10 "Oh, yeah. Rhonna Hodges is just -- is his sister.
11 And she just says he is nuts.
12 "Hmm.
13 "Yeah, Nate's dad would be okay."
14 And then you go on to the next page, that's page 60.
15 It goes, "Thank you for the brew.
16 "Yeah.
17 "Thank you for the company.
18 "All right.
19 "Thanks for coming over."
20 And the meeting breaks up.
21 Now, to an outsider, it looks like these gentlemen who
22 participated in this conversation made derogatory comments about
23 a person with disabilities, made fun of the fundamental belief of
24 the Latter-day Saints -- gosh -- the Seventh-day Adventists
25 relating to eating meat and drinking wine, made arguably
26 derogatory comments about sexual orientation as well as carried
27 on an extended discussion and told, in no uncertain terms, what
28 they thought of various people, all of which seems to me, in the
71
1 great scheme of things, could cause considerable concern to
2 Mr. Graham and the board of trustees, who have the responsibility
3 to defend the university from influences which interfere with
4 achieving its mission and safeguard the principles of moral
5 integrity and academic freedom to the community of scholars.
6 So it seems to me there is nothing inappropriate about
7 him contacting these three gentlemen and seeing if they would
8 resign. I'd note these gentlemen are all adults. I think they
9 all have advanced degrees. They were all there when these
10 conversations were occurring, so they had some idea what was on
11 the tape. And I don't see why he has to give them time to sign
12 the resignation letter or not. These are choices that you have
13 to make, and they may not be pleasant choices. But to say that's
14 coercion, it's just not there.
15 It's noted in some of the answers that no one has any
16 evidence that Mr. Graham bore any particular animus against them.
17 There's no evidence that Mr. Graham was doing anything other --
18 operating what he thought was appropriate by his own likes. I
19 would expect him to have consulted not only with Mr. Blackmer and
20 Mr. Jackson, but probably with a lot of other people, trying to
21 figure out the right thing to do. I would have expected him to
22 talk to some of the board members and, essentially, thought about
23 this over a considerable period of time and decided this is what
24 to do.
25 Now, as to whether or not this conduct breaches the
26 contract or inappropriate, I think, is missing the point. I
27 think the real point is did the conduct that these gentlemen
28 displayed in this conversation, where they are displaying values
72
1 on their face that are contrary to the values of the --
2 fundamental values of the church, make them unfit for leadership
3 positions? And do they breach the contract and the morals clause
4 themselves? And it seems to me that it did.
5 And so, I guess, for all the reasons stated as well as
6 my additional reasons, I would grant the motion for summary
7 judgment as to all four defendants and the motions for summary
8 adjudication on all issues, as requested.
9 I would note that if this matter went to trial, the
10 questioning, I would think, would be really extremely
11 embarrassing. I mean, I could just visualize questions about fay
12 burrito, and how you came up with that, and why didn't you
13 protest, and why did you laugh? Could be rather embarrassing. I
14 would think that the discussions about you don't want to be at a
15 meeting where Seventh-day Adventists are because you can't eat
16 red meat or drink wine and, therefore, you have to avoid them, I
17 think that even if you don't say it, the fact you might have
18 laughed when it's being said, I could just see the line of
19 questioning that could be grossly embarrassing in that context.
20 I would think the discussion about the person with
21 lupus and so forth and so on would also be highly embarrassing.
22 And so if I knew that people in leadership positions in my church
23 were on tape, publicly accessible to the entire world, making
24 comments like this, I would -- I would have great concern. And I
25 really don't see what else the church could have done.
26 So anyway, for all those reasons, I would grant the
27 motion.
28 Did you wish to be heard further, Mr. Daggett?
73
1 MR. DAGGETT: No, your Honor.
2 THE COURT: Mr. Connally?
3 MR. CONNALLY: No. We'll submit, your Honor.
4 THE COURT: Okay. Now, Mr. McCune, you've listened to
5 me. And you've been patient. And I'm sure I've afflicted you
6 and you disagree with most of what I said. So I will do you the
7 courtesy of allowing you to state what you wish to state. I will
8 not be offended. You can call me a jerk. I do have a pretty
9 thick skin. I've been called many bad things and I'm not
10 offended by it. But I invite you to complete your record.
11 Because, obviously, I would expect you to take an appeal on this.
12 MR. McCUNE: I appreciate that, your Honor. Yes, I
13 will not be calling the Court a jerk.
14 THE COURT: It's okay. If I were you, I would think I
15 was a jerk.
16 MR. McCUNE: I believe you're wrong, your Honor, but I
17 don't believe you're a jerk.
18 THE COURT: Okay.
19 MR. McCUNE: There's a couple of things that I need
20 to -- to clean up, at least from my standpoint, that I believe
21 that the Court got wrong on the facts. And one of those -- and I
22 think it's an important one -- was what I understood the Court to
23 say, that it was their understanding that Larry Black- --
24 Blackmer or Jackson obtained the transcript from the Spectrum.
25 And that is --
26 THE COURT: No, no, no. They -- I think I -- as I
27 understand it, they -- it was sent to the Spectrum by -- by
28 Larry (sic) Darnell. And I don't know where -- the person who
74
1 got it, but I got the impression it was sent to either Blackmer
2 or Jackson by Proffitt, was it?
3 MR. McCUNE: Yes.
4 THE COURT: That's how I understood it to be.
5 MR. McCUNE: Okay. Maybe I misunderstood what the
6 Court was saying.
7 THE COURT: But I just thought -- I don't know,
8 ultimately, where she got it from or how she got access or how it
9 got to a matter of general circulation. But again, it certainly
10 got out there fast.
11 MR. McCUNE: Well, that's my point. It didn't get out
12 there fast. There is no evidence that anyone at any time
13 downloaded that from the Spectrum. This is a post-litigation
14 manufactured reason. There is no indication -- what I find very
15 interesting is the --
16 THE COURT: Well, did they send it to Ms. Proffitt? Is
17 that what they did, is they sent a copy of the surreptitious
18 recording of Jackson and Blackmer, and Ms. Proffitt got it and
19 listened to the whole tape and saw this other stuff and became
20 concerned?
21 MR. McCUNE: The Court has repeatedly said "they." My
22 clients did not do that. My clients are not "they."
23 THE COURT: All right.
24 MR. McCUNE: Mr. Darnell did.
25 THE COURT: Mr. Darnell, who, if I was an attorney
26 arguing these cases, would argue -- apparently shared a community
27 of interest and the same values and were pursuing the same goals.
28 And arguably, an act by one of them might be attributable to all
75
1 of them.
2 Let's say, to separate it out, it was Mr. Darnell sent
3 the -- the recording, I guess, to Ms. Proffitt. Is that what he
4 did?
5 MR. McCUNE: That's my understanding.
6 THE COURT: Okay. Well, that's fine. Go ahead. You
7 may continue.
8 MR. McCUNE: What I mostly know is Ms. Proffitt, who is
9 a board member, sent it to Larry Blackmer.
10 THE COURT: Right. I understood that to be true.
11 MR. McCUNE: But what -- there is nothing in this
12 record that -- that that transcript, whether it was sent to
13 Spectrum, whether it was posted on -- or linked to Spectrum,
14 anybody ever saw it from Spectrum.
15 THE COURT: Let me ask you a more fundamental question.
16 Let's assume somebody does wrong, and that's what they believe.
17 And, in fact, they have a set of values and beliefs that are
18 inconsistent with the values of the church. Now, let's assume
19 they did their very best to conceal it, but it came to light. So
20 the underlying issue is they do, in fact, have this problem with
21 the church and they just have morality. Do you think it ought to
22 be protected? I mean, it comes up fairly often, where police
23 stumble over things that think they are hidden. And the question
24 is, is that a legitimate defense is -- that you were unsuccessful
25 in keeping your true values hidden?
26 MR. McCUNE: I, first of all, take exception to true
27 values being reflected in there, for much of what the Court read
28 related to Lenny Darnell. And to impute that to a morality issue
76
1 with my clients is not -- not fair.
2 THE COURT: No, you would think that if they were
3 there, you would do things other than laughing. You would be
4 protesting or saying that's not correct, and so forth. That's
5 not what I see going on.
6 MR. McCUNE: I understand the Court has -- has reached
7 a view of what -- what happened. I think it is inconsistent with
8 most people, in their private conversations, having an open
9 dialogue about many, many subjects. There are some things in
10 there that, obviously, my clients aren't very excited about and
11 wish they had not said. But this Court and the parties seem to
12 be really excited about a -- a First Amendment freedom of
13 religion issue without any concern about a privacy issue, that
14 people can have conversations in their own home, and the Court
15 can spent quite a bit of time reading it into the record, when
16 there was an expectation of privacy in that conversation.
17 That's -- I think those are inconsistent, caring about
18 one very important right and not caring about the other important
19 right.
20 THE COURT: So what you're really saying is that so
21 long as nobody knows about it and you're successful in keeping it
22 hidden, it's okay to engage in arguable misconduct.
23 MR. McCUNE: Well, the arguable misconduct part, I
24 can't accept. I think it is absolutely okay to have free-flowing
25 exchange of ideas.
26 THE COURT: So how would you characterize the
27 discussion about the fay burrito? Are you in favor of that
28 discussion?
77
1 MR. McCUNE: Well, in favor of it is a different
2 question. The answer is -- is --
3 THE COURT: Do you think that reflects poorly on the
4 church, if that's brought out that the people who are leaders of
5 the church were having that discussion?
6 MR. McCUNE: If that was the motivation for
7 Mr. Jackson, I think, when he wrote his e-mail, which is -- we've
8 attached as Exhibit 19, in which he says to Larry, after reading
9 the transcript, I am so disturbed, and perhaps angry, that I was
10 so foolish and soppy as to believe that hardcore dissidents like
11 the administrators at La Sierra could be open to diplomacy and a
12 pastoral approach to the issue. Fool me once, shame on you.
13 Fool me twice, shame on me. That's all I will say right now.
14 Damn. That is what was motivating Mr. Jackson. There's no
15 mention of -- there of, oh, my, we've got employees that are --
16 are --
17 THE COURT: Let's assume that's part of what is
18 motivating him. You have a discussion with these people. I know
19 what the tape says. You think you would have an understanding
20 going forward constructively, based upon the representations.
21 But yet, behind closed doors, you're being referred to as a
22 eunuch or a bully, and you see what their true colors are. And
23 now you realized, essentially, that you've been deceived and so
24 forth. I mean, that's my play before a jury.
25 MR. McCUNE: Absolutely. And I think that's the more
26 fair argument. I think all the rest of this is -- is just
27 mud-slinging.
28 THE COURT: You really don't think that Mr. Graham, who
78
1 has no animus, wouldn't be concerned about what he hears? I
2 mean, I -- if I was a Seventh-day Adventist, just a layperson
3 having nothing to say, just going to church and having to do my
4 job, I would be disturbed if I heard somebody talking about, hey,
5 if you go to Banff, you don't want to be around them because you
6 can't have the steak or the wine. You better take care of it
7 before or after. I would be offended by that.
8 MR. McCUNE: We would not be here if La Sierra had made
9 this decision and had done it in a appropriate way of going
10 through the proper channels. That didn't happen, and it didn't
11 happen for a reason.
12 THE COURT: All right.
13 MR. McCUNE: Ricardo Graham, as board chair, doesn't
14 take over the powers of the board. He is only one of many board
15 members. And his responsibilities were to act as a board, not to
16 act as a cowboy on his own. And that's exactly what he did.
17 I think that there can be arguments as to the
18 appropriateness. I think, certainly, we would concede there's a
19 number of things there that my clients would rather had not been
20 said. But the vast majority of what was said and read by the
21 Court was Lenny Darnell, not my clients.
22 The Court has repeatedly referred to my clients as
23 leaders of the church. My client had administrative positions at
24 La Sierra University.
25 THE COURT: Except for Mr. -- to be fair, Mr. Bradley
26 did not. There was no question Mr. Bradley was on a contract, he
27 was a teacher. So the only two people that had administrative
28 responsibility would be Mr. Kaatz and Mr. Beach.
79
1 MR. McCUNE: They did, for La Sierra University, not
2 the church.
3 THE COURT: Right. You're right. And if I said the
4 church, I meant the university.
5 MR. McCUNE: But it's an important distinction.
6 Because there's been -- if -- if the Court accepts the
7 declarations and the other litigation and the admissions by
8 Blackmer and Jackson that they don't have a right to make
9 employment decisions, it appears to me that the Court has
10 substituted its judgment as to what the motivation was for both
11 Daniel Jackson and for Ricardo Graham. I think the language
12 used --
13 THE COURT: Let's assume Mr. Jackson and Mr. Blackmer
14 have talked to Mr. Graham, saying like this, I know this is your
15 call, but this is what you really need to do. It's the only
16 right thing to do. If you don't do it, you really are violating
17 what the church stands for. And here's the transcript. And
18 let's say, I call you three times to make that argument. And you
19 finally look at it and you make the decision. Is that wrong?
20 MR. McCUNE: It's a lot closer call. I think it
21 probably is not wrong. I think the answer to that is it's
22 probably not wrong. The whole 47(c) has to do with expressing
23 opinions. This isn't plaintiffs' case. And this is what the
24 jury has to decide. Was it an expression of opinion, saying this
25 is what I believe, as opposed to this is what you will do? I
26 think if the jury concludes that those discussions were no more
27 than expressing opinions, then I think plaintiff does lose. But
28 I think that's a factual question for the jury to decide.
80
1 The -- the premise of -- of the earlier part of the --
2 I believe, the law clerk's memo, that seemed to be an
3 underpinning for this whole thing, was an acceptance that Daniel
4 Jackson and Larry Blackmer were acting out of church concerns.
5 The Court has read a number of things. And the e-mail that I
6 read, which was Exhibit 19, make it appear that Daniel Jackson
7 perhaps had his feelings hurt, perhaps was angry that he -- his
8 masculinity had been questioned. That's not a church concern.
9 That's a personal concern, but it's not a church concern.
10 There is a factual issue as to what was motivating
11 Daniel Jackson and Larry Blackmer and Ricardo Graham, who also --
12 there was a negative thing said about him on that tape. There
13 was some discussion, in the Court's reading of its tentative
14 view, that what was found on the transcript was sufficient for
15 La Sierra to terminate. Those are my words. That's not exactly
16 the Court's --
17 THE COURT: No.
18 MR. McCUNE: -- terminology. But that was my take from
19 it.
20 THE COURT: I think you're correct. I think had they
21 taken this to the board and said, we believe that this evidence
22 shows these people have violated the morals clause or are
23 conducting themselves in a way inconsistent with our values, and
24 decide to go ahead and terminate them, I think that would have
25 been okay.
26 MR. McCUNE: I think that we wouldn't be here if that's
27 what they did.
28 THE COURT: And I think the fact that even though you
81
1 have this, which has got to offend a lot of people, they decide
2 to take a more moderate ground and just return them to their
3 pastoral positions -- they had some words for what they did --
4 their tenured positions and so forth, to allow them to sit out
5 their contracts and so forth, I mean, it's hard to -- it's hard
6 to criticize that level of mercy.
7 MR. McCUNE: Well, there's no level of mercy. These --
8 these defendants absolutely intended to fire my clients until we
9 got involved. I don't accept that they showed any mercy
10 whatsoever.
11 THE COURT: But doesn't the resignation, before you got
12 involved, just say they resign their position of -- as dean and
13 the other position?
14 MR. McCUNE: It absolutely does. And conversations
15 that happened that Monday and Tuesday made clear that they
16 intended to terminate my clients.
17 THE COURT: Okay.
18 MR. DAGGETT: Your Honor --
19 THE COURT: I understand that's outside the record.
20 But go ahead, you may continue.
21 MR. McCUNE: The -- the additional -- so -- but I guess
22 my point on that issue is the clients weren't terminated by
23 La Sierra University. They didn't say, you're terminated. They
24 said, we're going to accept a resignation letter that was
25 obtained under coercion and misrepresentation, so it is not even
26 before the Court as to whether this was grounds for termination,
27 if it had gone through the normal channels.
28 To the extent La Sierra could argue that it was because
82
1 it was after-acquired evidence --
2 THE COURT: Understand, when you say -- I'm not
3 agreeing with you that it was inappropriate coercion or coercion
4 or that it's misrepresentation. But you may continue. We may --
5 we disagree about that, but I want to make clear that I might not
6 be in agreement with what you say, but you have a right to say
7 it. So I'll let you finish.
8 MR. McCUNE: So the point was that what had happened
9 was there was a signing of a resignation letter under duress,
10 coercion, misrepresentation, and plaintiffs have established or
11 put forth facts that would support that's a triable issue of
12 fact. Therefore, there was nothing for the board, when they
13 finally acted appropriately as a body, to accept that
14 resignation. So there was not an effective resignation, and
15 there never was termination proceedings.
16 The Court had indicated in part of the discussion that
17 this was a church-run university. At least, that was my
18 interpretation of what the Court said.
19 THE COURT: No, not in the direct sense of, like, the
20 Pope calling the shots. What I think is fairly clear is that the
21 church created the university to help facilitate the mission of
22 the church, that there are central core values down to the
23 various levels of the organization that the university is
24 supposed to live up to that are included in the bylaws and the
25 mission statement of the church. And that while the church is
26 not -- and again, you have to separate whether it's the general
27 counsel, the North Admission (sic) Division, or some other level,
28 they did not have the authority -- Mr. Blackmer and Mr. Jackson
83
1 did not have authority to hire, fire. I think it was Mr. Wilson,
2 who's head of the general counsel, he did not have authority. It
3 was -- the board had set up -- the board, which was chaired by
4 Mr. Graham, who is also president of the PCU (sic), that had the
5 authority.
6 So again, the way the Seventh-day Adventists have
7 organized themselves, they do, in fact, give autonomy for more
8 local decisions to the local people. But there's a larger
9 expectation that people live up to the core values of the
10 Seventh-day Adventist Church, that they're concerned when they
11 don't do so. And they express their opinions, and they have a
12 right to persuade people to act in accordance. And that -- it
13 seems to me that Mr. Graham, as chairman of the board for the PCU
14 and the PCU board, has a right to act, and that they were acting
15 as they saw consistent with the larger values of the church.
16 So it's -- it's a somewhat complicated, understandable,
17 and probably, in my view at least, a good system, I think, to
18 have this type of organization, allow local groups to accommodate
19 values of their communities, so long as it's within a larger
20 umbrella. In other words, we don't have to all build A-frame
21 houses. We can build Craftsman houses. We can build ranch
22 houses. And who cares, so long as the message gets out and the
23 people do well.
24 But then, there are certain core values -- certain core
25 values. And unfortunately, apparently evolution and creation is
26 one of those core values that causes considerable contention.
27 And if the church, the guy at the top all the way through it,
28 accepts -- expects that to be part of the curriculum and exerts
84
1 pressure upon the PCU and the board in its hiring and firing
2 process to enforce that, I think they can do so. And I think
3 that's a question of freedom of religion that this Court cannot
4 be entangled with. Okay?
5 MR. McCUNE: And the -- I would take -- I would
6 disagree with the Court. The Court's characterization of how
7 this process worked is what plaintiffs believe -- and plaintiffs
8 believe the facts they have presented provide an inference that
9 the church leaders providing their opinions -- and even
10 repeatedly providing their opinions is not what happened here.
11 It was church leaders bypassing La Sierra and instructing
12 Dr. Graham, as president of the PUC, as to what to -- to do.
13 And there -- the discussion as to evolution and
14 creation would suggest that I think I need to address that this
15 Court somehow has to get in the middle of whether the Seventh-day
16 Adventist church doctrine is right, wrong, or indifferent on
17 creation versus evolution. There has been no indication anywhere
18 that, certainly, for Dr. Kaatz or Dr. Beach, that they had any
19 involvement in that issue. Their -- as to whether the defendants
20 had -- I mean, they weren't -- they weren't teaching. They
21 weren't in any magazines. There's no discussion that would
22 indicate that their -- their position on that was any different
23 than the church, or even if it was different than the church,
24 that it would any way hinder their view of performing their jobs
25 as dean of the school and in development.
26 But the -- the concept that I struggle with is that
27 La Sierra University is completely separate from the church when
28 the church doesn't want to take responsibility for what La Sierra
85
1 University does. But the second that it disagrees with La Sierra
2 University, it says, forget that whole separation that we've
3 talked about with vicarious liability. We now -- we're all one
4 big church, and we're going to dictate what happens.
5 I think that in making the decision to separate
6 La Sierra from Loma Linda and to become a separate institution,
7 as we find in the declarations, they gave up that right to
8 dictate. They didn't have to. They chose to.
9 The Court used the term "auspices," relating to
10 La Sierra, in its discussion. And that's a term, before this
11 case, I was unfamiliar with. But in deposition testimony, the
12 Graham -- not Graham, excuse me -- Blackmer and Jackson indicated
13 that three universities in the system that they owned and
14 controlled, which was Loma Linda and Andrews and Oakwood College,
15 were under their auspices, under their control. They -- the --
16 in setting up these universities, they distinguished between the
17 auspice of control and -- and what was the situation with
18 La Sierra University.
19 The Court cited Silo. And Silo was a church, owned and
20 operated. Plaintiffs absolutely are not taking the position that
21 if all this had happened under a church-owned-and-operated
22 institution, that there would be any cause of action, or we would
23 agree that the First Amendment would be implicated. That's what
24 all of the cases are about that talk about the First Amendment
25 issue, when there's ownership and control. It seems to me that
26 there's been a merging of this 47 interest with ownership and
27 control, in order to reach the -- the First Amendment issue.
28 At least in my notes, I had a summary that the Court
86
1 had concluded that the process of obtaining the resignation
2 letters was not extreme or outrageous. I would suggest that that
3 is a question of fact for the jury. The Court may reach one
4 conclusion, but there is sufficient evidence, in our view, for
5 the jury to reach a different conclusion. And the Court, as a
6 gatekeeper function on that issue, should let that go forward to
7 the jury.
8 So I guess, your Honor, in summary, which I'm sure your
9 Honor is ready for, is that there are triable issues of fact as
10 to the relationship between La Sierra University and the church
11 defendants that influence whether these defendants had the right
12 to dictate to La Sierra University the employment decisions. We
13 have established facts, as I've discussed before, that -- that,
14 at least, make a triable issue of fact that they are a separate
15 institution that are affiliated with La Sierra -- with the
16 church. But that does not allow for the church to simply dictate
17 what happens at the university if they elected not to make it a
18 bible college, they elected not to put it under the auspices of
19 the church. And they're stuck with that, unless they want to
20 change that.
21 The other issue that we believe is there is a factual
22 issue that is well-established that makes it a triable issue of
23 fact as to what the motivation for Blackmer and Jackson were
24 in -- in taking the action and then, further, the -- there are
25 triable issues of fact as to whether there was direction from
26 Jackson to Graham as to what actions he was -- he was going to
27 take.
28 So I appreciate the Court's patience to allow me to go
87
1 through those things. But those -- unless the Court has any
2 further questions or comments, that that's --
3 THE COURT: I want to say, Mr. McCune, that even though
4 we disagree, I think highly of your skills as a lawyer. And I
5 appreciate the clearness and quality of your presentation. And
6 some people argue in a way that I can't even understand what
7 they're saying. I do not have that problem with you. So I
8 appreciate that.
9 MR. McCUNE: Thank you very much, your Honor.
10 THE COURT: And so I'll -- again, Mr. Daggett and
11 Mr. Connally, you didn't have a chance to say as much. But I've
12 seen the work you've done. But that's what the ruling's going to
13 be.
14 So rather than preparing a order for me to sign that is
15 so complicated and long that it invites further litigation --
16 I've been rather thorough on the record. So I would suggest that
17 you prepare an order that says the Court grants the motion for
18 summary adjudication as to all four named defendants on all
19 issues and grants the motion for summary judgment for the reasons
20 stated on the record. The Court rules that that's the
21 appropriate way to do it.
22 And then the Court of Appeal can take this up. And
23 they can discuss it, and they can address whether I'm wrong or
24 not. And that'll be an opinion that I will very much enjoy
25 reading when it comes down.
26 MR. CONNALLY: Thank you, your Honor.
27 THE COURT: On summary judgment motions, if you're
28 right when you grant them 50 percent of the time and upheld by
88
1 the Court of Appeal, you have a batting average that is better
2 than most.
3 So good luck to you all. Thank you.
4 (Proceedings adjourned.) 4
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3.5.14 Hearing Transcript

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3.5.14 Hearing Transcript

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1 RIVERSIDE, CALIFORNIA; WEDNESDAY, MARCH 5, 2014

2 BEFORE THE HONORABLE EDWARD D. WEBSTER

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