Civil Case No. BC 406900CALIFORNIA COURT OF APPEAL FOR THE
SECOND APPELLATE DISTRICT DIVISION FOUR
ALAN ROSENBERG, ANNE-MARIE JOHNSON, KENT MCCORD AND DIANE LADD,
Plaintiffs!Appellants. SCREEN ACTORS GUILD,
Defendant/Respondent.
From the Superior Court for Los Angeles County Honorable Judge
James C. Chalfant Los Angeles Superior Court Case No. BC406900
RESPONDENT'S BRIEF
Bingham McCutchen LLP Daniel Alberstone (SBN 105275) Roland
Tellis (SBN 186269) Sara Jasper Epstein (SBN 240577) Fourth Floor,
North Tower 1620 26th Street Santa Monica, CA 90404-4060 Telephone:
310.907.1000 Facsimile: 310.907.2000 Attorneys for Respondent
Screen Actors Guild
A173023949.5
TABLE OF CONTENTS
1.
INTRODUCTION STATEMENT OF RELEVANT FACTS A. B.C.
I 4 4 5 7 8 10 II
II.
Events Leading up to Appellants' Filing ofthe Action The January
26, 2009 Written Assent... Appellants Unsuccessfully Attempt to
Enjoin SAG from Acting Pursuant to the Written Assent... SAG Holds
a Special Meeting to Reaffirn1 the Acts Passed by the January 26,
2009 Written Assent.. Appellants Unsuccessfully Seek Expedited
"Extraordinary" Writ Review in This Court... SAG's Membership
Overwhelmingly Votes to Ratify a New Contract with the AMPTP
D. E. F. III.
THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN DENYING
APPELLANTS' EX PARTE APPLICATION FOR A TEMPORARY RESTRAINING ORDER
A. B. C. D. E. F. The Trial Court's Order Did Not "Exceed the
Bounds of Reason" California Law Authorizes SAG's Enactment of
Bylaws that Govern Voting Procedures SAG's Majority-Vote Written
Assent Procedure Does Not Conflict With Section 7211(b) The Tasks
Accomplished by the Majority-Vote Written Assent Do Not Conflict
With SAG's Bylaws Public Policy Weighs Heavily Against Court
Involvement in Internecine Issues Appellants' Requested Temporary
Restraining Order Was Flawed
II II 12 16 19 21 24 25 31
IV. V.
THE APPEAL SHOULD BE DISMISSED AS MOOT CONCLUSION
AI7J023949.5
TABLE OF AUTHORITIES
FEDERAL CASES
Motion Picture & Videotape Editors Guild Local 776, IATSE v.
Int'! Sound Technicians Local 695 800 F.2d 973 (9th Cir.
1986)CALIFORNIA CASES
22
Allen v. Hotel & Restaurant Employees' Int'I Alliance &
Bartenders' Int'I League 97 Cal. App. 2d 343 (1950) Archdale v. Am.
Int'I Specialty Lines Ins. Co. 154 Cal. App. 4th 449 (2007)
Association for Los Angeles Deputy Sheriffs v. County of Los
Angeles 166 Cal. App. 4th 1625 (Cal. App. 2d Dist. 2008) Blank v.
Kirwan 39 Cal. 3d 311 (1985) Braude v. Havenner 38 Cal. App. 3d 526
(1974) Calif. Trial Lawyers Ass'n v. Superior Court 187 Cal. App.
3d 575 (1986) California Dental Ass'n v. Am. Dental Ass'n 23 Cal.
3d 346 (1979) Californians for Fair Representation-No on 77 v.
Superior Court 138 Cal. App. 4th 15 (2006) Chantiles v. Lake Forest
II Master Homeowners Ass'n 37 Cal. App. 4th 914 (1995) Chernett v.
Jacques 202 Cal. App. 3d 69 (1988) Colburn Biological Inst. v.
Shaffer 12 Cal. 2d 168 (1938)
24 30
11 12 21, 28 22 21, 22 28 28 25 15
TABLE OF AUTHORITIES (continued)
Conservatorship of Wendland 26 Cal. 4th 519 (2001) Con!'1 Baking
Co. v. Katz 68 Cal. 2d 512 (1968) Daily Journal Com. v. County of
Los Angeles 172 Cal. App. 4th 1550 (Cal. App. 2d Dist. 2009)
Dominguez v. Superior Court 139 Cal. App. 3d 692 (1983) Downtown
Palo Alto Com. for Fair Assessment v. City Council 180 Cal. App. 3d
384 (1986) Envtl. Charter High School v. Centine1a Valley Union
High School Dist. 122 Cal. App. 4th 139 (Cal. App. 2d Dist. 2004)
Giles v. Horn 100 Cal. App. 4th 206 (2002) Haynes v. Annandale Golf
Club 4 Cal. 2d 28 (1935) Jennings v. Strathmore Public Util. Dist.
102 Cal. App. 2d 548 (1951) Kurz v. Fed. of Petanque U.S.A. 146
Cal. App. 4th 136 (2006) Marriage of Varner 55 Cal. App. 4th 128
(1997) MHC Operating Ltd. P'ship v. City of San Jose. 106 Cal. App.
4th 204 (2003) Oakland Raiders v. Nat'! Football League 131 Cal.
App. 4th 621 (2005) People v. Garde1ey 14 Cal. 4th 605 (1996)
28 24 25,27 30 25
28 27,29 21 27 22 12 29 22 19
111A!73023949.5
TABLE OF AUTHORITIES (continued)
People v. Travis 139 Cal. App. 4th 1271 (2006) Robbins v.
Superior Court 38 Cal. 3d 199 (1985) Salazar v. Eastin 9 Cal. 4th
836 (1995) Stewart v. Superior Court of San Diego County 100 Cal.
543 (1893) Walker v. Superior Court 53 Cal. 3d 257 (1991) White v.
Davis 30 Cal. 4th 528 (2003) Williams v. Inglewood Bd. of Realtors.
Inc. 219 Cal. App. 2d479 (1963)CALIFORNIA STATUTES
28
12
12
24
12
28
15, 21
Business & Professions Code Inoo Civil Code 2313
Corporations Code 307 Corporations Code 307(b) Corporations Code
7150 Corporations Code 7150(c) Corporations Code 7151 Corporations
Code nIl Corporations Code nIl (a)(8) Corporations Code nll(b)
Corporations Code n20IVA173023949.5
7, 8 29, 30 17, 18 18 13,14 13 13, 16 17 18, 26 passim 13,
14
TABLE OF AUTHORITIES (continued)
Corporations Code 7224 Corporations Code 7512 Corporations Code
7613 Corporations Code 7615OTHER AUTHORITIES
13 13 13 13
13 Cal. Law Revision Comm'n Reports, Recommendations and Studies
2201, 2228 (1976) 3-19 Ballantine and Sterling California
Corporation Laws (2008) 405.02[1] 3-19 Ballantine and Sterling
California Corporation Laws 404.04[1] Notes of Decisions No.2,
Deering's Ann. Cal. Corps. Code. 7151 (2008)
18
14, 15
21
15
vA173023949.5
I.
INTRODUCTION
Appellants ask this Court to do as they say, but not as they do.
Respondent Screen Actors Guild ("SAG") and its members are governed
by SAG's duly-enacted Constitution and Bylaws. For decades, that
Constitution and Bylaws have permitted the use of a "written
assent" procedure allowing SAG's governing Board of Directors to
take action without a meeting, so long as the Board action was
supported by a majority vote. Indeed, during the presidency oflead
Appellant Alan Rosenberg andthe vice-presidency ofAppellant
Ann-Marie Johnson, SAG's Board has
utilized, without objection, the majority-vote "written assent"
procedure onnumerous occasions. So what changed? In a nutshell,
Appellants found
themselves on the losing side of a majority-vote. Their
candidate for SAG's leadership was not supported by the majority of
SAG's Board, and they refused to accept defeat. Appellants
filibustered a Board meeting vote, and so SAG utilized its
long-standing, majority-vote written assent procedure. Appellants
now claim on appeal that the lack of a Board meeting renders SAG's
majority-vote "written assent" election process invalid. In doing
so, Appellants urge this Court to disregard a decadeslong, accepted
practice explicitly permitted by SAG's governing documents, and
would require SAG to adopt inapplicable provisions of the
California Corporations Code. Moreover, Appellants apparently
choose to ignore the fact that the identical acts passed by the
contested written assentIA!73023949.5
were subsequently reaffirmed and readopted by a majority of
SAG's Board at a duly held meeting, at which every member of the
Board was represented. Settled Califomia law and public policy
weigh heavily against this Court's involvement in this intemecine
feud. Appellants contend that California law prohibits SAG from
acting by majority written assent in accordance with its
longstanding Bylaws and Constitution (see Appellants' Opening Brief
["AOB"], at p. 2)-even though Appellants themselves have utilized
the exact same procedure on numerous occasions. Appellants further
contend that this appeal presents "a critical question of first
impression in the courts of the state" that will "provide guidance
... for all California corporations and for all future cases
involving such corporations." (AOB, at p. 21.) Appellants are wrong
on both counts. First, SAG's Board consists of71 members, who
reside in different states and who collectively represent the
diverse interests of SAG's approximately 120,000 members.
Appellants' proposed interpretation of California Corporations Code
Section 7211 (b) would prevent the Board from taking any action in
the absence of a formal meeting unless all 71members of the Board
reached unanimous agreement. Appellants' position
is not only contrary to a straightforward reading of Section
7211 (b) and its greater statutory scheme but would effectively
paralyze SAG's goveming body and cripple its ability to efficiently
make decisions, given the unique
2A173023949.5
size and structure of its Board. Indeed, it was SAG's choice to
avoid the unanimous written consent procedure suggested by Section
7211 (b) by instituting a majority-vote provision in its Bylaws and
Constitution that would better suit its needs. Appellants' proposed
rigid interpretation of Section 7211 (b) finds no support in
California law or public policy. Not only has our Legislature made
clear that strong principles of corporate self-determination lay at
the heart of the Califomia Corporations Code, but our Courts have
similarly been loath to interfere in the corporate sphere. Second,
contrary to Appellants' elevated rhetoric, this appeal does not
present a "critical" or unsettled issue that requires this Court's
inm1ediate attention. Rather, these proceedings are little more
than a pretext for Appellants' attempt to end-run a months-old
decision made by a majority of SAG's governing Board. Appellants
were neither "prejudiced" nor "disempowered" by the acts passed by
a majority of the Board on January 26, 2009-they were simply
outvoted. Indeed, there is very good reason why this Court has
never before felt the need to comment on Section 7211(b). With few
exceptions, the minutiae ofa corporation's selfgovernance decisions
are best left in the boardroom, /lot the courtroom. The lower court
exercised sound discretion when it correctly found that the
California Legislature has sanctioned a company's use of bylaws to
regulate the conduct of its affairs, and that SAG's enactment of
bylaws that 3A173023949.5
provide for a majority-vote "written assent" procedure is
authorized by, and does not conflict with, settled California law.
Respondent SAG respectfully requests that the Court deny this
appeal and affirm the trial court's February 5, 2009 order denying
Appellants' ex parte application for a temporary restraining order.
II. STATEMENT OF RELEVANT FACTS
A.
Events Leading up to Appellants' Filing of the Action
Beginning in April 2008, SAG began negotiations with the
Alliance of Motion Picture and Television Producers ("AMPTP")
regarding the tenns of SAG's collective bargaining agreement. (AOB,
at p. 5.) SAG's Chief Negotiator and National Executive Director
("NED") at that time was Douglas Allen ("Allen"). (Id.) The most
controversial subject of theSAG/AMPTP negotiations was the manner
in which SAG members would
receive residual payments from content presented in "new media"
electronic formats-such as from DVDs and the Internet. (Id. at p.
7.) By January 2009, the SAG/AMPTP negotiations were at a
standstill after many months of bargaining, and a deep rift had
fornled among SAG's members regarding the manner in which SAG
should approach the negotiation process. Fueled by concerns about
the state of the economy, many members of SAG's governing Board
believed that a change in SAG's leadership would revive the
contract negotiations and avoid further job
losses.4AJ73023949.5
On January 12 and 13,2009, SAG's Board of Directors (the
"Board") held a 28-hour "marathon" meeting. (Respondent's Request
for Judicial Notice ["RRJN"], Ex. 2, pp.034-35, Declaration of
Michelle Bennett ["Bennett Decl."], at ~ 8.) Appellant Alan
Rosenberg ("Rosenberg"), SAG's President, presided over the meeting
as its chairperson. At the meeting, various members of SAG's Board
expressed displeasure with Allen's negotiation tactics, and
proposed a motion to remove Allen as NED. (AOB, at p. 9.) However,
Appellants and their allies on the Board employed a variety of
filibustering tactics in order to prevent the Board from voting on
the motion. (See RRJN, Ex. 2, pp. 03435, Bennett Decl., at ~
8.)B.
The January 26, 2009 Written Assent
On or about January 26, 2009, SAG Board members holding 52.52%
of the votes signed a "written assent," which was circulated by
email and fax, and delivered it to SAG (the "Written Assent").
(RRJN, Ex. 2, pp. 035& 039-40, Bennett Decl., at ~ 9; AOB, at
pp. 10-11; see also Appellants'
Appendix ["AA"], Vol. 1, Ex. 5, pp. 00231-233.) Among other
things, the Written Assent terminated Allen as NED and Chief
Negotiator and installed David White ("White") as interim NED and
Jolm T. McGuire ("McGuire") as interim Chief Negotiator. (rd.)
Polls taken by email and/or fax are the commonly used fonn of
written assent provided for by Article V, Section 1(J)(4) of
SAG's
5Ai73023949.5
Constitution and By-Laws, and have been considered valid acts of
SAG's Board for many years. (RRJN, Ex. 2, p. 031, Bennett Dec!., at
~ 3.) Pursuant to that provision of the Constitution and By-Laws,
the written assent of a majority of the votes of the Board is
required for action to be taken by written assent. (Id.) Since June
of 2004, SAG has conducted ten separate email/fax polls of the
Board, resulting in decisions on thirteen different questions
submitted to the Board. (RRJN, Ex. 2, pp. 031-32, Bennett Dec!.,
at'l14.) The types of issues considered by the Board by email/fax
poll range from relatively minor to those of major importance,
including the delegation of authority to hire senior executive
staff, approval of the tem1ination of the offering of certain
collective bargaining agreements, appointment of candidates to
outside boards or trusteeships, approval of the creation of
taskforces and appointment of their members, and delegation of the
authority to call a strike of the membership. (Id. at ~'114-5.)
Appellants themselves concede that SAG has employed the "written
assent" procedure, without objection, in order to allow the Board
to validly act by majority vote without a meeting. (AA, Vo!. 1, Ex.
5, p. 00196, McCord Dec!., '1117.) And, as recently as April 2009,
Appellant AnneMarie Jolmson, SAG's First Vice President, has
employed the "written assent" procedure to approve the appointment
of a Hollywood Division CoChair of SAG's Interactive Negotiating
Committee. (RRJN, Ex. 2, p. 032,6AI7J023949.5
Belmett Decl., at 'If 5.) None of the written assents by
email/fax poll approved since June 2004 have ever been unanimously
approved by all Board members. (Id. at pp. 031-32, Bennett Decl.,
'If 4.)C. Appellants Unsuccessfully Attempt to Enjoin SAG from
Acting Pursuant to the Written Assent
On February 3, 2009, Appellants filed a Complaint against SAG
and several of its individual board members for Breach of Fiduciary
Duty and Violation of California Business & Professional Code
17200. 1 (AA, Vol.1, Ex. 1, pp. 00001-20.) Appellants alleged that
the January 26, 2009
Written Assent wrongftilly "dispensed with the need for prior
notice or actual Board meeting, discharged Mr. Allen from his
position, and disbanded the TV/Theatrical Committee." (Id. at 'If
59, pp. 00009:27-10:1.) Contemporaneous with the filing of their
Complaint, Appellants also filed an Ex Parte Application for a
temporary restraining order ("TRO") to seek to enjoin SAG, its
Board, and its newly-appointed interim NED, Chief Negotiator and
Negotiation Taskforce from taking any action under the January
26,2009 Written Assent. (AOB, at p. 15; AA, Vol. 1, Ex. 2, pp.
00021-00 I32.) The relief sought by Appellants' TRO application
included a request that the tenllS of the Written Assent be
"lawfully presented to and approved by a binding vote of the full
SAG Board at a properly noticed and lawful Board meeting ...." (AA,
Vol. 1, Ex. 2, p. 00022, II. 6-12; AA,
I
Appellants recently dismissed the individual board members.7
A/7J023949.5
Vol. 2, Ex. 6, pp. 00322:20-00323:8.) The Court denied
Appellants' Ex Parte Application on procedural grounds. (AOB, at p.
15.) On February 5, 2009, Appellants filed a First Amended
Complaint for Declaratory Relief and Violation of Business &
Professions Code 17200 et seq., again challenging the January 26,
2009 Written Assent, and
renewed their Ex Parte Application for a TRO. (AOB, at p. 16;
AA, Vols. 1-2, Exs. 3-6, pp. 00133-320.) A lengthy hearing ensued,
at which the merits of Appellants' Ex Parte Application were argued
extensively. (AA, Vol. 2, Ex. 9, pp. 404-437.) The trial court
denied the TRO Application, ruling, among other things, that
Appellants had failed to establish a probability of success on the
merits. (AOB, at pp. 16-17; AA, Vol. 2, Ex. 9, p. 00436, II. 14-15,
19-23 & Ex. 11, pp. 00444-447.)
D.
SAG Holds a Special Meeting to Reaffirm the Acts Passed by the
January 26, 2009 Written Assent
On February 3, 2009, the same day that Appellants first filed
their Complaint below, White, as SAG's NED, noticed a special
meeting of SAG's Board for February 8, 2009, pursuant to the
requirements of the SAG's Constitution and By-Laws, including
Article V, Section I(J)(3). (RRJN, Ex. 2, pp. 035-36, Bennett
Decl., at '1110; AA, Vol. I, Ex. 5, p. 00245.) On February 5, 2009,
a notice was sent to all members and alternates of the Board by
SAG's standard notification process, advising them that the
8A173023949.5
agenda for the meeting of February 8, 2009, had been posted to
the secure section of the SAG website designated for Board members
and alternates, and that each attending member would receive a hard
copy of the agenda in advance of the meeting, either by ovemight
mail or in person. (RRJN, Ex. 2, p. 36, Bennett Dec!., at ~ II.)
Item 2 on the meeting agenda was the "Adoption and Reaffirmation of
Written Assent of January 26, 2009." (Id. at pp. 36,41; Appellants'
Request for Judicial Notice ["ARJN"], Ex. C, pp. 00460-461, 00464,
Declaration of Alan Rosenberg, at ~ 16.) On February 8, 2009, SAG's
Board of Directors convened at a dulynoticed meeting. (See RRJN,
Ex. 2, pp. 035-37, Bennett Dec!., ~~ 10-12.) Each and every member
of the Board was represented. (Id. at ~ 12.) Appellant Rosenberg
presided over the meeting for nearly its entire duration. (Id.)
Rosenberg began the February 8, 2009 Meeting by adopting the agenda
circulated to the members at White's direction. (Id. at pp. 037,
046, Bennett Dec!., ~ 13.)At no time prior to the vote adopting the
agenda did any Board
member
Appellants included
make a point of order regarding the
validity of the manner in which the meeting was noticed. (RRJN,
Ex. 2, p. 37, Bennett Dec!.,~
13.) And, at no time during the twelve-hour meeting
did Rosenberg relinquish his chair to debate. (See Id. at pp.
036-37, Bennett Dec!.,~
12.)
9AI7J023949.5
At the meeting, a majority of SAG's Board dealt a fatal blow to
the instant Appeal by affirming and readopting the acts previously
passed by the Written Assent. (See RRJN, Ex. 2, pp. 037-38, Bennett
Dec!., ~ 14.) The matter was debated for approximately one hour.
(Id.) By a resounding 59.02% majority -larger than the 52.52%
majority that originally passed the written assent - the Board
voted to reaffirm and readopt the acts previously passed by written
assent. (RRJN, Ex. 2, pp. 054-55.) Appellants made and seconded a
motion to reconsider the vote, and a point of order was immediately
raised, asserting that the motion for reconsideration was out of
order. (RRJN, Ex. 2, pp. 038 & 055-56, Bennett Dec!., ~ IS.)
Although Rosenberg, as the meeting's chair, ruled that the motion
for reconsideration was in order, he was ovemJied by a majority of
the Board, who deemed Appellants' motion to reconsider to be out of
order. (RRJN, Ex. 2, p. 038, Belmett Dec!., ~ IS.)
E.
Appellants Unsuccessfully Seek Expedited "Extraordinary" Writ
Review in This Court
On or about February II, 2009, Appellants filed a Petition for
Writ of Mandate ("Writ Petition") in this Court, by which they
requested expedited review of the lower Court's denial of their
temporary restraining order. (ARIN, Ex. A.) Appellants' Writ
Petition was summarily denied on February 13,2009.
10A173023949.5
F.
SAG's Membership Overwhelmingly Votes to Ratify a New Contract
with the AMPTP
On June 9, 2009, SAG's members voted to approve a two-year
TV/Theatrical contract with the AMPTP, by a vote of78 percent to 22
percent, with more than 30,000 members voting in favor. (RRJN, Exs.
4, 5, pp. 101, 105.) This is the same contract that was the subject
of the negotiations that led to SAG's passage and subsequent
reaffirmation of the January 26, 2009 Written Assent. Among other
things, the Written Assent removed a committee that had been
involved in the negotiation of the same TV/Theatrical contract that
was ratified on June 9, 2009. (AOB, at p. 11.) SAG's new two-year
agreement covers film and digital television programs, motion
pictures and new media productions, and expires on June 30,2011.
(RRJN, Ex. 4, at p. 101.)
III.
THE TRIAL COURT DID NOT ABUSE ITS DISCRETION IN DENYING
APPELLANTS' EX PARTE APPLICATION FOR A TEMPORARY RESTRAINING ORDER
A. The Trial Court's Order Did Not "Exceed the Bounds of
Reason"
In view of the discretion vested in the trial court in
addressing an application for temporary restraining order or motion
for a preliminary injunction, appellate review of a trial court's
ruling in such a proceeding is extremely deferential. Ass'n for Los
Angeles Deputy Sheriffs v. County of Los Angeles, 166 Cal. App. 4th
1625, 1634 (Cal. App. 2d Dist. 2008) (affirming denial of motion
for preliminary injunction). As Appellants 11A173023949.5
concede (see AOB, at p. 23), a reviewing court shall not disturb
a trial court's decision to grant or deny a motion for a
preliminary or temporary injunction absent a showing that the h'ial
court abused its discretion. Salazar v. Eastin, 9 Cal. 4th 836,
849-50 (1995); see also Robbins v. Superior Court, 38 Cal. 3d
199,205 (1985). The test for abuse of discretion is whether the
trial court "exceeded the bounds of reason." Walker v. Superior
Court, 53 Cal. 3d 257, 272 (1991); see also Blank v. Kirwan, 39
Cal. 3d 311, 331 (1985) ("unless a clear case of abuse is shown and
unless there has been a miscarriage ofjustice a reviewing court
will not substitute its opinion and thereby divest the trial court
of its discretionary power."); Marriage of Varner, 55 Cal. App. 4th
128, 138 (1997) ("[t]he showing on appeal is wholly insufficient
ifit presents a state of facts ... which ... merely affords an
opportunity for a difference of opinion. An appellate tribunal is
neither authorized nor warranted in substituting its judgment for
the judgment of the trial judge.") (internal quotation marks
omitted). The hefty burden of establishing an abuse of discretion
lies squarely on Appellants. See Blank, at 331.
B.
California Law Authorizes SAG's Enactment of Bylaws that Govern
Voting Procedures.
Appellants concede that SAG's bylaws authorize a majority-vote
"written assent" procedure without a meeting. (AOB, at p. 21.)
Specifically, Article V, 1 (J) (4) of SAG's bylaws provides:
12AI7J023949.5
Except as provided otherwise in this Constitution, any acts
shall be validfor all
purposes with or without a meeting if approved by the written
assent ofa majority ofthe votes ofthe Board ofDirectors, or such
higherpercentage of the Board votes as may be required by this
Constitution. (See AA, Vol. 1, Ex. 5, p. 00245 [emphasis added].)
Appellants do not - because they cannot - dispute that SAG has
utilized and implemented such majority-vote written assent
procedures on numerous occasions in the past. (See AA, Vol. 1, Ex.
5, p. 00196, Declaration of Kent McCord, ~ 17 [describing SAG's use
of the majoritymle written assent procedure].) Indeed, such
practice was utilized multiple times under the Presidency of
Plaintiff Alan Rosenberg and First Vice President Anne-Marie
Johnson, respectively. (See RRJN, Ex. 2, pp. 03132, Bennett Decl.,
~~ 3-5.) Section 7150 of the Corporations Code provides that a
non-profit may adopt bylaws "[e]xcept as provided in subdivision
(c) and Sections 7151,7220,7224,7512,7613 and 7615." Corp. Code
7150. Section 7211 (b) of the Corporations Code, on which
Appellants rely, is not
13A173023949.5
included in the list of statutes that are not subject to
variation by bylaws. 2 SAG's ability to regulate its affairs
through bylaws is unremarkable and, indeed, the preferred practice.
A leading corporate treatise in California explains that the
Nonprofit Mutual Benefit Corporation Law, under which SAG was
organized, "provide[s] relatively detailed statutory rules
respecting the conduct of directors' meetings, but with relatively
few exceptions these can be changed by the articles or bylaws." See
3-19 Ballantine and Sterling California Corporation Laws (2008)
405.02[1] (emphasis added). Therefore, when drafting bylaws,
"consideration should be given at that stage to the need or
desirability of altering the statuto I)!
scheme infavor ofone exactly tailored to a cOlporation 's
needs." Id.(emphasis added). (AA, Vol. 2, Ex. 8, p. 00400.) The
treatise further explains that "[t]he bylaws of a nonprofit
corporation, like those of a business corporation, mainly regulate
the internal affairs of the corporation. However, to the extent
that they specifY membership rights (as they frequently do), the
bylaws ofa nonprofit
cOlporation serve a more important jililction than those ofa
business cOlporation, the rights of whose shareholders must appear
in the articles."
By way of example, Section 7220, which is expressly named in
Section 7150 as a statute that cannot be varied by a corporation's
bylaws, provides: "[n} 0 amendment ofthe articles or bylaws may
extend the term oj a director beyond that for which the dIrector
was elected, nor may any bylaw provision increasing the terms of
directors be adopted without approval of the members...." Corps.
Code 7220(a) (emphasis added). No such prohibitory language appears
in Section 7211 (b).2
14A173023949.5
Id. at 404.04[1] (emphasis added). (AA, Vol. 2, Ex. 8, p.
00399.) Our Supreme Court has upheld and enforced corporate bylaws
providing for a majority vote of the corporation's goveming members
without a meeting. Colbum Biological Inst. v. Shaffer, 12 Cal. 2d
168, 169 (1938) (holding that where bylaws of corporation provided
for a threefourths (3/4) majority of trustees to make decisions on
behalf of the organization by a written resolution without a
meeting, the vote of three trustees over the objection of a fourth
was valid and binding on the corporation); see also Notes of
Decisions No.2, Deering's Ann. Cal. Corps. Code. 7151 (2008). The
Colbum decision is entirely consistent with the lower court's
ruling in this case, that the "written assent" procedure provided
in Article 5 I (J)(4) of SAG's bylaws does not violate - and if
anything, is harmonious with - longstanding Califomia law. Courts
should abstain from wholesale interference in a corporation's
chosen manner of self-govemance. Williams v. Inglewood Bd. of
Realtors, Inc., 219 Cal. App. 2d 479, 488 (1963) ("In general the
by-laws of associations organized for social, charitable, moral, or
religious purposes will not be scrutinized closely by the courts,
nor will they be interfered with unless there has been an abuse of
discretion and a clear, unreasonable and arbitraly invasion of
private rights.").
15A173023949.5
C.
SAG's Majority-Vote Written Assent Procedure Does Not Conflict
With Section 7211(b).
Appellants argue, for the first time, that SAG's majority-vote
written assent procedure violates Section 7151 of the Corporations
Code, which provides that "[t]he bylaws may contain any provision
...not in conflict with law...." Corps. Code 7151. According to
Appellants, because SAG's majority-vote, written assent procedure
"conflicts" with Section 7211(b)'s unanimous-vote, written consent
procedure, SAG's bylaws violate Section 7151. Not so. First,
Section 7211(b) provides that "[a]n action required or permitted to
be taken by the board may be taken without a meeting, if all
members of the board shall individually or collectively consent in
writing to that action." Corps. Code 7211(b) (emphasis added). By
its terms, Section 7211 (b) applies only to acts for which a board
meeting is required. Here, however, SAG's majority vote, written
assent procedure is an act for which a board meeting is not
required. 3 Bylaws, Art. V I (J)(4). (AA, Vol. I, Ex. 5, p. 00245.)
Aside from the plain language of SAG's written assent bylaw,
multiple provisions governing the voting and3 SAG's bylaws specify
the particular types of board actions that require a meeting. See,
e.g., Art. V 1 (J)(2)(a)(b) [vote to extend length ofa board
meeting] (AA, Vol. I, Ex. 5, p. 00245); Art. V 3 (H) (1)-(2)
[nomination and election of individual to fill vacancies in offices
of President and Secretary-Treasurer] (AA, Vol. I, Ex. 5, pp.
00250-51); Art. XVIII I(a) [amendment, adoption or repeal of
ConstItution or By-laws] (AA, Vol. I, Ex. 5, p. 00269); Art. XI
3(A), incorporating by reference Appendix I, (I)(C) [voting at
Joint Board of Directors' meetings of the American Federation of
Television and Radio Artists ("AFTRA") and SAG] (AA, Vol. I, Ex. 5,
pp. 00264 & 00275).
16A173023949.5
quorum procedures attendant to meetings of SAG's Board of
Directors expressly affirm the Board's right to act without a
meeting by the written assent of a majority of votes of its
members. See Art. V I (J)(5)(f) [governing the counting of votes at
SAG board meetings less than two directors are present from each
division of the organization] ("Nothing in this Section shall be
construed so as to limit the authority of the Board of Directors to
act by written assent as provided by Section 4 of this Article.")
(AA, Vol. I, Ex. 5, p. 00246); Art. V. I (J)(6) [requiring that all
voting at board meetings be done in person or by telephone or
videoconference] (" ... this shall not preclude the right of the
Board of Directors to act by written assent of a majority of votes
of its members, or such higher percentage of the Board votes as may
be required by this Constitution.") (AA, Vol. I, Ex. 5, p. 00247).
Accordingly, where SAG's bylaws clearly authorize the Board to act
by majority assent without a meeting, imposition of Section nil
(b)'s onerous unanimity requirement - which applies to board acts
that require a board meeting - would impose a far greater burden on
SAG's decisionmaking procedures than SAG's founding documents
contemplate. Second, Section nil (b) can only be construed as a
"default" statute that is subject to variation by bylaws adopted by
a non-profit corporation for its own self-governance. An
examination of the Legislative history of Section 1211's sister
statute - Corporation Code Section 307 - is 17A173023949.5
instructive in this regard. Section 307(b) is identical to
Section 7211(b), but it applies to for-profit corporations. See 13
Cal. Law Revision Comm'n Reports, Recommendations and Studies 220
I, 2228 (1976) (stating that, in recommending the provisions of the
Corporations Code that presently govern nonprofit corporations, the
provisions of the new non-profit chapter generally follow the
substance of the General Corporation Law). (AA, Vol. 2, Ex. 8, p.
00403.) The legislative comments contained in the annotations to
Section 307 expressly state that it may be amended by bylaws, as
follows: "This section contains technical mles relating to the
calling, noticing and functioning of board meetings ... all ofthese
provisions are
subject to alteration in the articles (including any
'super-majority' vote requirement) or bylaws." Legis. Com. com.,
Deering's Ann. Cal. Corps.Code 307 (2008) (emphasis added). (AA,
Vol. 2, Ex. 8, p. 00384.) It would be anomalous to treat Section
7211 (b), which parallels Section 307(b) verbatim, any differently.
Finally, it is important to note that in enacting the Corporations
Code, the California legislature made it a point to note when its
provisions
cannot be varied by a company's bylaws. For example, Section
7211(a)(8)provides "[t]he articles or bylaws may not provide that a
lesser vote than a majority of the directors present at a meeting
is the act of the board." Corps. Code 7211(a)(8) (emphasis added).
No such prohibitory language appears in Section 7211 (b). And, as
Appellants aptly note in their Opening 18A173023949.5
Brief, no such prohibitOlY language should be implied where the
Legislature has intentionally excluded it. (See AOB, at p. 25,
citing People v. Gardeley, 14 Cal. 4th 605, 621-22 (1996) ["When
the Legislature has used a tenn or phrase in one part of a statute
but excluded it from another, courts do not imply the missing term
or phrase in the part of the statute from which the Legislature has
excluded it."].)
D.
The Tasks Accomplished by the Majority-Vote Written Assent Do
Not Conflict With SAG's Bylaws
Appellants erroneously contend that one of the acts accomplished
by the majority-vote written assent - disbanding the TV/Theatrical
Committee and fonning a "Negotiation Taskforce" in its stead -
violated Article VI, Section 7(A) of SAG's bylaws, which requires a
two-thirds vote of the Board to "remove any conmlittee member,
alternate or co-chair." (AOB, at pp. 31-32; AA, Vol. I, Ex. 5, p.
00254.) In support of their contention, however, Appellants repeat
the same erroneous arguments that the Court below already
considered and rejected. Appellants mischaracterize the written
assent's wholesale disbanding of the TV/Theatrical Committee as the
effective "removal" of 12 "committee members," in an attempt to
bring the Board's action within the purview of the two-thirds
requirement of Article VI, Section 7(A). (AOB, at p. 34.) However,
no committee members were removed from a committee, and Appellants
simply apply the wrong bylaw provision to the
19A173023949.5
Board's conduct. Critically, SAG's bylaws permit the Board to
establish committees "which shall serve at its pleasure." See
Article V, Section 1(I)(3). (AA, Vo!. 1, Ex. 5, p. 00244.)
Additionally, SAG's Article V, Section 1(I)(4), provides that "the
Board of Directors may, from time to time, delegate any of its
powers and duties to any committees, which delegation shall be
revocable by the Board ofDirectors at any time." (1d. [emphasis
added].)This is precisely what SAG's Board accomplished by the
written assent. It exercised its right to disband the TV/Theatrical
Committee in its entirety, and did not "remove" any of its
individual conmlittee members. Appellants improperly conflate the
concepts of a "COlmnittee" and a "Taskforce," which are accorded
disparate and distinct roles under SAG's longstanding rules of
govemance. (RRJN, Ex. 2, pp.033-34, Bennett Dec!., at ~ 7.)
Appellants lament that the Taskforce created by the Written Assent
is actually the "TV/Theatrical Committee in disguise." (AOB, at p.
33.) Appellants are misguided. While SAG's National Board has the
power under Article V, Section 1(1)(4) to delegate its authority to
a committee, there is no authority for the Board to delegate its
authority to a "taskforce." (AA, Vo!. 1, Ex. 5, p. 00244.) Thus,
unlike the TV/Theatrical Committee, the Taskforce has no authority
to act on the Board's behalf, but can only make recommendations on
which the Board has discretion to act. (RRJN, Ex. 2, pp. 033-34,
Bennett Dec!., at ~ 7.) 20A!73023949.5
E.
Public Policy Weighs Heavily Against Court Involvement in
Internecine Issues
SAG has the authority to adopt, amend, or repeal bylaws, but
that power is subject to limitations contained in its articles of
incorporation, in the Nonprofit Mutual Benefit Corporation Law, and
in the bylaws themselves once adopted. Within these limits, SAG has
a "free hand" in regulating its affairs, "the only other test of
the validity of bylaws being whether they operate reasonably and
equally as to all members." See 3-19 Ballantine and Sterling
California Corporation Laws 404.04[1] (AA, Vol. 2, Ex. 8, p.
00399); accord Braude v. Havenner, 38 Cal. App. 3d 526, 533 (1974);
Haynes v. Annandale Golf Club, 4 Cal. 2d 28,30 (1935). Courts must
guard against unduly interfering with an organization's autonomy by
substituting judicial judgment for that of the organization in an
area where the competence of the court does not equal that of the
organization. See California Dental Ass'n v. Am. Dental Ass'n, 23
Cal. 3d 346, 353-354 (1979). "The practical and reasonable
construction of the constitution and bylaws of a voluntary
organization by its governing body is binding on the membership and
will be recognized by the courts." Williams, supra, 219 Cal. App.
2d at 486. Below, Appellants did not challenge SAG's enactment of
its bylaws. Instead, they asked the trial court, and now this
Court, to substitute its judgment for that of SAG's Board of
Directors on questions such as the
21AI7J023949.5
proper interpretation of SAG's governing documents and the
proper management of SAG. Such relief would plunge this Court into
the "dismal swamp" of an internal union dispute. Kurz v. Fed.
ofPetangue U.S.A., 146 Cal. App. 4th 136, 149-50 (2006). California
public policy weighs heavily against judicial intervention in the
internal disputes of unions and other organizations. See, e.g.,
Kurz, at 149-50; Oakland Raiders v. Narl Football League, 131 Cal.
App. 4th 621, 644-45 (2005); Calif. Trial Lawyers Ass'n v. Superior
Court, 187 Cal. App. 3d 575, 580 (1986); Motion Picture &
Videotape Editors Guild, Local 776, etc. v. Inri Sound Technicians,
etc., Local 695, 800 F.2d 973, 975 (9th Cir. 1986). Judicial
"reluctance to intervene in internecine controversies ... is
premised on the principle that the judiciary should generally
accede to any interpretation by an independent voluntary
organization of its own rules which is not unreasonable or
arbitrary." Calif. Trial Lawyers, 187 Cal. App. 3d at 580. Courts
may also decline to exercise jurisdiction over intemal
organizational disputes if "the resulting burdens on the judiciary
outweigh the interests of the paliies at stake." Calif. Dental
Ass'n, 23 Cal. 3d at 353. Appellants half-heartedly argue - without
any factual or legal support - that "public policy" considerations
mandate reversal of the lower Court's order and require that a
corporation's "written assent must be unanimous." (AOB, at pp.
29-31.) Indeed, Appellants' cited authoritiesmost of which are
either unpublished or hail from other jurisdictions - are
22A173023949.5
inapposite. And, Appellants' assertion that "there was no
exchanging of views and no deliberate consideration of any issue"
is belied by the facts. In reality, Appellants and the other
opponents ofthe Written Assent had a full and fair opportunity -
and did - debate its merits on at least two occasions. The issues
encompassed by the challenged Written Assent were first debated at
a 28-hour-long Board meeting that took place on January 12 and
13,2009, at which Appellants and their allies opted to filibuster
at the 28-hour January meeting instead of allowing the Board to
vote. (See RRJN, Ex. 1, p. 009 & Ex. 2, pp. 034-35, Bennett
Dec!., at ~ 8). Upon Appellants' insistence that SAG convene a
formal Board meeting, theidentical issues were debated yet again
for approximately one hour at the
February 8, 2009 Board meeting, at which a majority of SAG's
Board of Directors voted to reaffiml and readopt the acts
previously passed by the Written Assent. (RRJN, Ex. 1, pp. 023-24
& Ex. 2, pp. 036-38, Bennett Dec!., at ~~ 12-14.) By all
accounts, the issues passed by the January 26, 2009 Written Assent
- and subsequently re-affirmed at a duly-held Board meeting - were
deliberately vetted and considered by SAG's Board of Directors. The
notion of "negotiated consensus" upon which Appellants dwell is
purely aspirational and has no practical application here. All that
is required by California law - and by SAG's governing documents -
is that a majority of SAG's Board reach a reasoned decision in
order to bind the corporation. 23A173023949,5
It is ironic that Appellants purport to base this appeal on
principals
of democratic self-govemance, yet complain that SAG's actions
contravene "public policy" when they find themselves on the losing
side of a democratically-administered vote.
F.
Appellants' Requested Temporary Restraining Order Was Flawed
A temporary restraining order or preliminary injunction is not
designed to restore the parties to the status they occupied prior
to the acts complained of. See Cont'l Baking Co. v. Katz, 68 Cal.
2d 512, 528 (1968) ("The general purpose of [a preliminary]
injunction is the preservation of the status quo until a final
determination of the merits of the action."); Stewart v. Superior
Court of San Diego County, 100 Cal. 543, 546 (1893) ("The office of
a writ of injunction, as its name imports, is peculiarly a
preventive and not a remedial one; it is to restrain the wrongdoer,
not to punish him after the wrong has been done or to compel him to
undo it."); see also Allen v. Hotel & Restaurant Employees'
Int'l Alliance & Bartenders' Int'I League, 97 Cal. App. 2d 343,
348 (1950). Here, however, Appellants' requested temporary
restraining order did not seek to preserve the status quo - it
sought to radically alter it. In essence, Appellants asked the
Court below, under the guise of a temporary restraining order, to
suasponte revise SAG's bylaws, and restore SAG's former leadership.
That is
not the function of a temporary restraining order, and the trial
Court acted
24A!73023949.5
correctly in denying Appellants' request. Accordingly, the very
relief that Appellants seek on this appeal- for this Court to
"undo" the events of the past six months and to restore the parties
to the positions they occupied before January 26, 2009 - is not
only impracticable, but is contrary to law.
IV.
THE APPEAL SHOULD BE DISMISSED AS MOOTSAG's previously filed
motion to dismiss this appeal as legally moot
was denied by this Court on June 9, 2009. Since then, additional
events have transpired that - in themselves - moot important
aspects of this appeal, including, inter alia, Appellants' efforts
to restore a negotiating conmlittee whose primary charge was to
negotiate the same TV/Theatrical Agreement ratified by SAG's
membership on June 9, 2009. SAG respectfully renews its challenge
to this appeal as moot. See Chernett v. Jacques, 202 Cal. App. 3d
69, 71 (1988) (court may consider merits of dismissability issue
following initial denial of motion to dismiss appeal)."It is well
settled that an appellate court will decide only actual
controversies and that a live appeal may be rendered moot by
events occurring after the notice of appeal was filed." Daily
Journal Corp. v. County of Los Angeles, 172 Cal. App. 4th 1550,
1557 (Cal. App. 2d Dist. 2009); accord Downtown Palo Alto Com. for
Fair Assessment v. City Council, 180 Cal. App. 3d 384,391 (1986)
("[A]n appeal presenting only abstract or academic questions is
subject to dismissal as moot."). On February 8, 2009, following the
Respondent Court's denial of Appellants' 25A173023949.5
Ex Parte Application for a temporary restraining order, SAG's
Board of Directors convened at a duly-noticed meeting. (See RRJN,
Ex. 2, pp. 03537, Bennett Dec!., "iI"iI 10-12.) At the meeting, a
majority of SAG's Board removed any doubt as to the legitimacy of
its actions by affirming and
readopting the acts previously passed by written asset. Based on
this fact alone, the entire Appeal should be dismissed as moot.As
an initial matter, Appellants mischaracterize the Board's February
8, 2009 vote as an affirmance of an illegal act. (AOB, at pp. 3637;
RRJN, Ex. 3, p. 70, Opp. to Motion to Dismiss.) However, the
Board's majority decision to affirm and readopt the acts passed by
the January 26, 2009 Written Assent was not a vote to
"retroactively validate" the Written Assent. To the contrary, the
February 8, 2009 vote - which took place at a duly held meeting at
which every Board member was represented constituted an independent
and presumptively valid act of the Board. See Corps. Code
7211(a)(8). (See also RRJN, Ex. I, pp. 018-024.) That act
superseded the January 26, 2009 Written Assent and rendered the
instant appeal moot. Indeed, much to Appellants' chagrin, the
Board's February 8, 2009 vote reaffinned the same acts passed by
the January 26, 2009 Written Assent by an even larger majority.
(RRJN, Ex. 2, pp. 037-38, Bennett Dec!.,
'1 14.)
Appellants' purported attack on the procedures applied at
the
Board's February 8, 2009 meeting is nothing more than a
transparent, "Hail Mary" attempt to reverse the majority's
decision. 26A173023949,5
Yet another subsequent event moots at least part of this appeal.
On June 9, 2009, an overwhelming majority of SAG's membership
ratified a new TV/Theatrical contract with the AMPTP. (RRJN, Exs.
4, 5, pp. 101, 105). The instant appeal, however, predominantly
concerns Appellants' challenge to SAG's January 26, 2009 Written
Assent, which, among other things, disbanded a TV/Theatrical
Negotiating Conunittee whose primary charge was to negotiate the
Vel)1 same contract with the AMPTP that has now been ratified. (See
AOB, at p. 11; RRJN, Ex. 2, p. 039.) Clearly, this Court can no
longer restore a conunittee for the purpose of negotiating the
TV/Theatrical agreement-because those contract negotiations have
already concluded. See, ~ Daily Journal Corp., 172 Cal. App. 4th at
1557 (appeal that sought to unwind and declare invalid a contract
that had already expired by its own tenns was moot); Giles v. Hom,
100 Cal. App. 4th 206, 219 (2002) (appeal in action to enjoin
county's expenditure of public funds to hire private contractors
dismissed as moot where contracts expired and were fully perfonned
pending appeal); Jennings v. Strathmore Public Util. Dist., 102
Cal. App. 2d 548, 549 (1951) (dismissing appeal as moot where
plaintiff appealed trial court's denial of injunction to declare a
public utility district contract invalid, after the contract had
been awarded and work under the contract fully completed). In their
opposition to Respondents' Motion to Dismiss Appeal as Moot,
Appellants correctly identified two well-established discretionary
27A173023949.5
exceptions to the rules regarding mootness: (l) when the case
presents an issue of broad public interest that is likely to recur;
(2) or when there may be a recurrence of the controversy between
the parties. See Envtl. Charter High School v. Centinela Valley
Union High School Dist., 122 Cal. App. 4th 139, 144 (Cal. App. 2d
Dist. 2004). (RRJN, Ex. 3, pp. 093-94.) However, neither of those
exceptions applies here. First, this case - which involves a
challenge by a highly litigious minority faction of an
entertainment guild to the Board's decision to replace members of
the union's leadership - does not present an issue of "substantial
and continuing public interest." California's appellate courts have
historically invoked the "public interest" exception to the
mootness doctrine only in cases that either affect a large subset
of California's population,4 or present issues of widespread
constitutional or fiscal impact. 5
4 See, e.g., Chantiles v. Lake Forest II Master Homeowners
Ass'n, 37 Cal. App. 4th 914,922 (1995) (analogizing homeowners
associations to "minigovernments" that affect "a large number" of
California citizens); Braude v. Havenner, 38 Cal. App. 3d 526,
529-30 (1974) (considering proxy voting procedures within the
one-million-member Automobile Club of Southern California). See,
e.g., White v. Davis, 30 Cal. 4th 528, 536-37 (2003) (deeming a
taxpayer action to enjoin California controller's disbursement of
funds without the enactment of an emergency appropriation bill an
issue of "profound public significance"); Conservatorship of
Wendland, 26 Cal. 4th 519, 524, fn. I (2001) (considering
limitations on conservators' power to withhold life-sustaining
treatment to a conscious conservatee); People v. Travis, 139 Cal.
App; 4th 1271, 1279-80 (2006) (considering whether mandatory
collection of DNA samples violates fourth amendment's prohibition
against nonconsensual searches and seizures); Californians for Fair
Representation - No on 77 v. Superior Court, 138 Cal. App. 4th
15,22 (2006) (finding that "[t]he purity of elections and the full
disclosure of all contributions and expenditures are matters of
public interest.").5
28A173023949.5
Notwithstanding Appellants' lofty rhetoric, the instant appeal
simply does not rise to the level of "profound public significance"
necessary to warrant consideration on its merits. Second, the issue
is not likely to recur between the parties. Indeed, SAG's
decades-old bylaw providing for majority written assent has
neverbefore been challenged by members of its board. This appeal
involves a specific "Written Assent" that took place on January 26,
2009 under very
specific factual circumstances that involved the negotiation of
a new TV/Theatrical contract. Such fact-dependent questions are
more properly decided on a case-by-case basis. See MHC Operating
Ltd. P'ship v. City of San Jose, 106 Cal. App. 4th 204, 215 (2003);
Giles, 100 Cal. App. 4th at 228 ("Because plaintiff s claim is a
particularly factual determination that must be resolved on a
case-by-case basis, dependent upon the specific facts of a given
situation, it is not one on which we would exercise our discretion
to address on the merits, despite the fact that it is moot.,,).6 In
addition, Appellants erroneously contend, based on a misapplication
of Civil Code section 2313, that the corporate acts taken by a
majority of SAG's Board of Directors at the Febmary 8, 2009 Board
meeting are "unenforceable." (RRJN, Ex. 3, pp. 086-87.)
However,
6 Appellants are not without a remedy, should they continue to
dispute SAG's longstanding majority written assent procedure.
Pursuant to Article XVIII, Section 1 of SAG's Bylaws, Appellants
may institute proceedings to amend the contested bylaw. (See AA,
Vol. 1, Ex. 5, p. 00269.) 29A17302J949.5
Section 2313 of the Civil Code has no application here, for a
whole host of reasons. That statute - which applies to the narrow
situation in which aprincipal ratifies an unauthorized act by an
agent - is irrelevant to this case,
which involves a corporate body's reaffinnance of its own prior
act. 7 Moreover, Appellants' contention that they "would be
prejudiced if the February 8 Motion was deemed to ratify the
January 26 written assent" is unintelligible. (RRJN, Ex. 3, pp.
086-87.) Appellants - each of whom is a member of SAG's Board of
Directors - are decidedly not third parties to the acts of SAG's
Board. And, being on the losing side of a
democratically-administered majority vote does not constitute the
kind of "prejudice of third persons" contemplated in Section 2313.
Even if Civil Code Section 2313 were somehow deemed to apply to
this case, it would still be irrelevant here because Appellants
effectively gave their "consent" to the February 8, 2009 board
meeting's procedure and agenda. The agenda - which Appellant
Rosenberg himself adopted - prominently featured the very action
item that Appellants now purport to challenge-the "Adoption and
Reaffinnation of Written Assent of January 26, 2009."(RRJN, Ex. 2,
pp. 036-37 & 041, Bennett Decl., ~~ II, 13.)7
As such, the Archdale and Dominguez decisions cited by
Appellants which considered the unrelated issue of whether a
defendant, as a third party to the plaintiffs attorney-client
relationship, would be prejudiced if the plaintiffs post-filing
ratification of its complaint were to preclude the defendant from
asserting a statute of limitations defense - are inapplicable. See
Archdale v. Am. Int'! Specialty Lines Ins. Co., 154 Cal. App. 4th
449, 480 (2007); Dominguez v. Superior Court, 139 Cal. App. 3d
692,695 (1983). 30A173023949.5
SAG's Board has met and voted in favor of the acts previously
passed by written assent. This Appeal is legally moot.
V.
CONCLUSIONThe relief requested by Appellants is not only
unwaITanted, but this
Court is not capable of providing any effective relief, in light
of SAG's Board's affinnance and readoption of the acts passed by
the disputed Written Assent. The Court should not interject itself
into this internal union matter, and, in any event, the trial court
acted properly and within its discretion, and certainly did not
"exceed the bounds of reason." SAG's enactment of bylaws that
provide for a majority-vote written assent procedure is authorized
by California law. Nor do such bylaws conflict with Section 7211(b)
or any other provision oflaw. The appeal should be denied and the
lower court's ruling affirnled. Alternatively, the Court should
dismiss the appeal as moot.
DATED: July 1,2009
Bingham McCutchen LLP By:_
'--_~L-
Roland Tellis Attorneys for Respondent Screen Actors Guild
31A173023949.5
CERTIFICATE OF WORD COUNT
I certify that this Motion to Dismiss contains 7,509 words, as
counted by the Microsoft Word 2003 software used to generate
it.
DATED: July 1,2009
Bingham McCutchen LLP
L~/By:
. =) 2-
=------'----------Roland Tellis Attomeys for Respondent Screen
Actors Guild
32AI7J023949.5
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con-ect and that this declaration was executed on July 1,2009, at
Santa Monica, California.
N73080632.1/300981 0-0000337304
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