Plaintiffs' Motion to Disqualify Siegel & Yee as Opposing Counsel
April 3, 2014
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PLAINTIFFS' MOTION TO DISQUALIFY SIEGEL & YEE AS OPPOSING COUNSEL
Amy Sommer Anderson #282634
156 2nd Street
San Francisco, CA 94105
Attorney for Plaintiff,
PACIFICA DIRECTORS FOR GOOD GOVERNANCE
SUPERIOR COURT OF CALIFORNIA COUNTY OF ALAMEDA
PACIFICA DIRECTORS FOR GOOD GOVERNANCE, an unincorporated association of Directors of Pacifica Foundation Radio, Plaintiff(s),
PACIFICA FOUNDATION RADIO, a California Not-for-Profit Corporation; RODRIGO ARGUETA, LYDIA BRAZON, JIM BROWN, BENITO DIAZ, ADRIANA CASENAVE, BRIAN EDWARDS-TIEKERT, JOSE LUIS FUENTES, HANK LAMB, TONY NORMAN, LAWRENCE REYES, CERENE ROBERTS, and MARGY WILKINSON as individuals and in their official capacities as members of the Board of Directors of Pacifica Foundation Radio; and DOES 1-100, inclusive, Defendant(s).
Case No. HG 14720131
NOTICE OF MOTION AND MOTION TO DISQUALIFY SIEGEL & YEE AS OPPOSING COUNSEL
Date: June 12, 2014
Time: 9:00 AM
Hearing judge: Hon. Ioana Petrou
Action Filed: April 3, 2014
Trial date: NOT SET
Reservation number R-1511880.
To Defendant PACIFICA RADIO FOUNDATION and to its attorney of record:
NOTICE IS HEREBY GIVEN that on June 12, 2014, at 9:00 AM, or as soon thereafter as the matter may be heard, in Department 15 of this court, located at 1221 Oak Street, Oakland, California, Plaintiffs will, and hereby do, move for an order disqualifying and barring the law firm of Siegel & Yee and their employees and associated counsel from representing or assisting Defendant PACIFICA RADIO FOUNDATION in this action. The motion is made on the grounds that:
(1) Co-Defendant Jose Luis Fuentes is currently employed as an attorney at Siegel & Yee;
(2) Siegel & Yee partner Dan Siegel committed multiple improprieties against the interests of PACIFICA FOUNDATION RADIO in his previous capacity as director of the PACIFICA RADIO FOUNDATION Board and former General Counsel and Interim Executive Director of PACIFICA RADIO FOUNDATION;
(3) Siegel & Yee has been used by-and possibly acted in collusion with-Defendants, including Siegel & Yee employee Fuentes, in perpetration of their unlawful actions, which are the subject of this action;
(4) PACIFICA FOUNDATION RADIO has not properly hired Siegel & Yee to represent it in any capacity, including, specifically, as general counsel and defense counsel in this action.
(5) PACIFICA FOUNDATION RADIO has not consented to Siegel & Yee's co-representation with any of the defendant directors, including co-defendant and Siegel & Yee employee Fuentes;
(6) Dan Siegel himself drafted Ms. Reese's letter in offer of employment and, thus, is likely to be called as a necessary witness in this action;
(7) Siegel & Yee formerly represented PACIFICA FOUNDATION RADIO at a time when one or more of Plaintiffs were directors of PACIFICA FOUNDATION RADIO. In the course of Siegel & Yee's previous employment by PACIFICA FOUNDATION RADIO they obtained confidential information that they may be called on to use against Plaintiffs in representing PACIFICA FOUNDATION RADIO in this action; and
(8) Siegel & Yee have represented opposing parties, including one or more of the co-defendants in the instant action, in lawsuit against PFR, the organization whose interests the firm now purports to represent.
This motion is based upon California Rules of Professional Conduct, Rule 3-310(E), which prohibits an attorney from accepting employment adverse to a former client where by reason of such former representation the attorney has obtained confidential information material to the present case; upon case law providing grounds to disqualify opposing counsel for misconduct and the appearance of impropriety; and upon California law which provides that when an individual attorney is disqualified for conflict of interest, vicarious disqualification of his entire law firm is mandated. This motion is further based upon Code of Civil Procedure, Section 128(a)(5) which grants the court authority to disqualify counsel.
Plaintiffs' motion is based on this notice of motion, on the declarations of Heather Gray, Ali Lexa, Casey Peters, Carolyn Birden and Daniel Borgstrom and the memorandum of points and authorities served and filed herewith, on the records and file in this action, and on any evidence that may be presented at the hearing of the motion.
DATED: May 19, 2014 AROPLEX LAW
Amy Sommer Anderson
Attorney for Plaintiff,
PACIFICA DIRECTORS FOR
MEMORANDUM OF POINTS AND AUTHORITIES
TABLE OF CONTENTS
TABLE OF AUTHORITIES
I. INTRODUCTION AND STATEMENT OF FACTS
II. NEITHER THE FIRM NOR ANY PARTNER OR ASSOCIATE OF SIEGEL & YEE HAS BEEN HIRED BY PFR TO DEFEND THE DEFENDANT IN THIS ACTION
III. THE COURT IS AUTHORIZED TO DISQUALIFY OPPOSING COUNSEL
IV. THERE EXIST AT LEAST FOUR INDISPUTABLE BASES FOR
A. DISQUALIFICATION IS PROPER WHERE THERE IS A CONFLICT OF INTEREST
B. DISQUALIFICATION IS PROPER WHERE ATTORNEY IS EXPECTED TO BE A TRIAL WITNESS
C. THE COURT MAY DISQUALIFY OPPOSING COUNSEL BASED ON APPEARANCE OF IMPROPRIETY IN LIGHT OF ENTANGLEMENTS AMONG THE PARTIES, THEIR INTERESTS AND THEIR COUNSEL
1. Dan Siegel Has Engaged in Extravagant, Unauthorized Self-Dealing to the
Detriment of PFR
2. Messrs Siegel and Fuentes Have Exhibited Aggravated and Threatening Behavior, Including Threats of Physical Violence, at PFR Board Meetings
3. Messrs Siegel and Fuentes Have Engaged In Additional Unauthorized Activity
Purportedly On The Organization's Behalf
D. DISQUALIFICATION IS PROPER BASED ON EHICAL TRANSGRESSIONS EVEN WHERE THERE IS NO BREACH OF DUTY
V. COUNSEL'S ENTIRE LAW FIRM SHOULD ALSO BE DISQUALIFIED
TABLE OF AUTHORITIES
Cal Pak Delivery, Inc. v. United Parcel Service, Inc., 52 Cal. App. 4th 1
David Welch Co. v. Erskine & Tulley, 203 Cal. App. 3d 884
Henriksen v. Great American Savings & Loan, 11 Cal. App. 4th
In re Dresser Indus., 972 F.2d 540
Kennedy v. Eldridge (2011) 201 Cal. App. 4th 1197
Klein v. Superior Court, 198 Cal. App. 3d 894
Lyle v. Superior Court (1981) 122 Cal. App. 3d 470
William H. Raley Co. v. Superior Court (1983) 149 CA3d 1042
Zador Corp. v. Kwan, 31 Cal. App. 4th 1285
Code Civ. Proc. § 128
Code Civ. Proc. § 128(a)(5)
Corp. Code § 5233
Rules of Professional Conduct, Rule 3-310(E)
Rules of Professional Conduct, Rule 5-210 16
I. INTRODUCTION AND STATEMENT OF FACTS
The continuous and incongruous involvement of attorney Dan Siegel and his law firm in Pacifica Foundation Radio's legal affairs brings to harsh light the self-serving motives underlying the defendants' conspiratorial actions in contravention of PFR and the supporting public's interests. In addition to his clients' directorial malfeasance, Dan Siegel engages in the instant action in perpetuation of his own political interests in favoring PFR station KPFA to the detriment of his client, the defendant organization. Additionally, Mr. Siegel has promoted his own personal financial interests by spurring PFR to engage in numerous protracted, ill-advised and poorly executed personnel investigations and litigation actions, which he assumed, for a fee, or assigned to his firm, Siegel & Yee. Siegel & Yee has billed Pacifica Foundation Radio hundreds of thousands of dollars during the time that Dan Siegel has been involved with the nonprofit charity. See, generally, Declaration of Heather Gray In Support of Motion to Disqualify ("Gray Decl.").
On April 3, 2014, Plaintiffs, PACIFICA DIRECTORS FOR GOOD GOVERNANCE ("PDGG"), filed an action against PACIFICA FOUNDATION RADIO, a California Not-for-Profit Corporation, and RODRIGO ARGUETA, LYDIA BRAZON, JIM BROWN, BENITO DIAZ, ADRIANA CASENAVE, BRIAN EDWARDS-TIEKERT, JOSE LUIS FUENTES, HANK LAMB, TONY NORMAN, LAWRENCE REYES, CERENE ROBERTS, and MARGY WILKINSON as individuals and in their official capacities as members of the Board of Directors of Pacifica Foundation Radio for, inter alia, declaratory and injunction relief concerning various unauthorized and illegal and procedurally improper actions taken in violation of PFR's bylaws and the laws of the State of California regulating non-profit corporate governance.
At a hearing on Plaintiffs' motion for temporary restraining order and order to show cause, Alan Yee of the law firm of Siegel & Yee ("S&Y") appeared on behalf of Defendant and PFR Chair of the Board Margy Wilkinson. Gray Decl. at ¶ 2.
On April 15, 2014, Plaintiffs filed a First Amended Complaint. Gray Decl. at ¶ 3.
On April 25, 2014, the law firm of Siegel & Yee, purporting to act on Defendant PFR's behalf, filed a cross-complaint against PFR's Executive Director, Summer Reese. Gray Decl. at ¶ 4.
Plaintiffs bring the instant challenge of Siegel & Yee's claimed representation of PFR because, in brief, PFR has not properly hired Siegel & Yee to defend it in this matter, at least three members of the firm, including the named partners, have substantially conflicting interests with those of the foundation, and defendant-S&Y employee Jose Luis Fuentes and S&Y partner Dan Siegel have engaged in substantial misconduct in their respective positions as agents of PFR, demonstrating inherently unethical disregard for the interests of the organization they now claim to represent. Gray Decl. at ¶ 5.
Plaintiffs recognize the need for PFR to retain a true advocate to defend PFR in this action. Despite Plaintiffs' pleas to discuss options and proceed with the most equitable and procedurally sound means of hiring defense counsel, Defendants staunchly refuse to engage in such discussions or otherwise comply with their duties as fiduciaries of the organization. Gray Decl. at ¶ 6.
Following commencement of this action, Defendant directors, including Mr. Fuentes, held at least one private meeting without due notice to-and at the exclusion of-the plaintiff directors, including meeting in private to unilaterally proceed with the hiring process by which the law firm of Siegel &Yee was ultimately retained, purportedly on the organization's behalf, an action said subset of directors had no right to take. Gray Decl. at ¶ 7, 9.
Plaintiffs objected to both the hiring process and hiring of Siegel & Yee due to conflicts of interest the firm and its employees hold with PFR on multiple occasions. Gray Decl. at ¶ 8.
Mr. Fuentes, a co-defendant of PFR in this action, has been employed as an attorney of Siegel & Yee, which is purportedly defending PFR in this action, since 2003. Mr. Fuentes served on KPFA's local station Board since 2012 and on the national board since January 2014. Despite these clear conflicts of interest, it does not appear that Mr. Fuentes recused himself from participating in Defendants' improper hiring of Siegel & Yee to defend PFR, and PFR has not consented to Siegel & Yee's representation of PFR as co-defendant of Mr. Fuentes. Gray Decl. at ¶¶ 10-13.
Siegel & Yee partner Dan Siegel served as a member of the PFR Board of Directors from February 2011 to January 2014 and on the KPFA local station Board of Directors from December 2009 to January 2014. Gray Decl. at ¶¶ 14-15. Mr. Siegel also served as self-appointed Pacifica National Election Supervisor from February-April 2008 and Interim Executive Director ("IED") during two periods: for about six months in 2005 and from October 2007 to April 2008. Declaration of Carolyn Birden in Support of Motion to Disqualify ("Birden Decl.") at ¶ 3.
In 2007, while serving in his dual role as PFR's Corporate Counsel and IED, Mr. Siegel interfered with a Board election by posting a statement on the PFR website attacking statements of a director candidate on KPFA's slate. Mr. Siegel further interfered with election procedures by firing National Election Supervisor Casey Peters and illegally breaking into Mr. Peters' home to confiscate election equipment and materials. Declaration of Casey Peters in Support of Motion to Disqualify ("Peters Decl.") at ¶ 8.
In November of 2013, Mr. Siegel offered to personally investigate the sexual harassment claims against then-CFO Raul Salvador. Shortly thereafter, the Siegel investigation was terminated because the complaining employee refused to meet with Mr. Siegel due to his lack of independence in the matter. Gray Decl. at ¶ 16.
The law firm of Siegel & Yee served as PFR's Corporate Counsel from January 2006 to January 2009. It has served as counsel of record for plaintiffs, as well as for some of PFR's co-defendants in this action, in several lawsuits against PFR, the foundation whose interests it now claims to represent. The firm has acted as both plaintiff and defense counsel for and against Pacifica, generating hundreds of thousands of dollars in billing. Gray Decl. at ¶¶ 18-20.
From 1999 to 2002, Dan Siegel, Hunter Pyle and various members of the Siegel & Yee law firm represented Lydia Brazon and others in a case against PFR in Alameda County Superior Court.
This case monumentally changed the organization's bylaws and generated millions of dollars in litigation bills. These new bylaws instituted extraordinarily expensive nationwide elections every two out of three years. Adelson v. Pacifica Foundation, Case No. 814461-0. Gray Decl. at ¶ 20.
In 2007, while serving as PFR Corporate Counsel, Dan Siegel attempted to represent both PFR and former KPFK General Manager Eva Georgia, but was removed from the case by Pacifica's insurance company because of a serious conflict of interest. Birden Decl. at ¶ 4.
From 2010 to 2012, four members of KPFA's Local Station Board-Dan Siegel, Margy Wilkinson, Conn Hallinan, Mal Burnstein-organized an alternative fundraiser to divert funds from the station's fundraiser in order to collect money to conditionally offer it to PFR if program changes they objected to were reversed. One of the programmers who was laid off is Defendant, Brian Edwards-Tiekert. A shareholder derivative suit alleging breach of duty of loyalty by those four board members survived attempts to dismiss by Siegel & Yee in the Alameda Superior Court and the California Court of Appeals before being abandoned by the plaintiff due to lack of funds. Gray Decl. at ¶ 21 and, generally, Declaration of Daniel Borgstrom in Support of Motion to Disqualify ("Borgstrom Declaration").
Members of S&Y have personally participated in acts directly at issue in the instant lawsuit. Mr. Siegel personally drafted Ms. Reese's letter in offer of employment and, thus, is likely to be called as a necessary witness in this action. Gray Decl. at ¶ 22. Both of the PFR Board's motions to terminate Ms. Reese, which are at issue in the underlying action, were introduced by Jose Fuentes, the defendant director employed by Siegel & Yee. . Gray Decl. at ¶ 23.
Co-defendant and Siegel & Yee employee Fuentes has, on multiple occasions, overtly interfered with the Board's right to hear and consider opinion of counsel on various employment and station license matters. On two such occasions, Mr. Fuentes engaged in threatening, disrespectful and rude behavior toward attorneys retained by Pacifica Foundation Radio to advise the Board of Directors, including Melodie Virtue of Garvey, Schubert and Barer, and Cathy Harris of Kator, Parks and Weiser.
Mr. Fuentes threatened to start a "malpractice campaign" against Harris's law firm due to his personal disagreement with the legal advice she offered regarding Summer Reese's religious objection to obtaining a Social Security Number and the need to heed the advice of General Counsel Terry Gross on this matter in that it was not cause for termination. Gray Decl. at ¶ 24.
On February 18, 2014, a complaint was filed with the California Bar Association against Mr. Fuentes for his behavior toward Cathy Harris and his general interference with the Board's ability to receive advice of counsel, including then-current General Counsel, Terry Gross, at the February 7, 2014 Board meeting. Gray Decl. at ¶ 25.
On March 28, 2014, Director Jose Luis Fuentes sent a letter from his law firm email account on his employer's letterhead to personnel at Paychex purporting that he and the law firm Siegel & Yee represented PFR. He directed Paychex to remove Executive Director Summer Reese as an authorized signer and operator of Paychex accounts and to add "interim Executive Director" Bernard Duncan and "Chief Financial Officer" Raul Salvador as authorized signers and operators of PFR's Paychex accounts. In support of his letter, Fuentes attached the draft minutes of the March 27, 2014 Board meeting and false declarations of Secretary Cerene Roberts. Gray Decl. at ¶ 26.
On May 2, 2014, Siegel & Yee partner Dan Siegel sent an instructional notice to Paychex purportedly on PFR's behalf despite the fact that PFR has not hired Siegel & Yee as corporate counsel or otherwise. Gray Decl. at ¶ 27.
II. NEITHER THE FIRM NOR ANY PARTNER OR ASSOCIATE OF SIEGEL & YEE HAS BEEN HIRED BY PFR TO DEFEND THE DEFENDANT IN THIS ACTION
On at least one occasion, one of the Plaintiff directors objected to the hiring of Siegel & Yee, as well as the process by which Siegel & Yee was purportedly hired. Because defendant director Fuentes is an employee-attorney of S&Y, the hiring of S&Y is considered a self-dealing transaction requiring Board approval. Where there arises a conflicting interest concerning a member of the Board, a majority of the non-interested directors must ratify the conflict of interest decision (excluding any interested director) after documenting that conflicts of interest have been thoroughly discussed. CA Corp. Code Section 5233. If a committee or individual is authorized to conduct such review, the board must ratify the decision by a majority vote at the following Board meeting. Id. A self-dealing transaction, under California law, is a transaction to which the charity is a party and in which one or more directors has a material financial interest. Id. Section (a). Under Section 5233, a self-dealing transaction is proper only if all of the following conditions are met:
(a) The charity entered into the transaction for its own benefit, and
(b) The transaction was fair and reasonable as to the charity at the time it entered into the transaction, and
(c) Before implementing the transaction or any part of it, all material facts regarding the transaction and the director's interest in it were disclosed to the Board, and a majority of the disinterested directors then in office (without counting the vote of the financially interested director):
(i) Determined, after reasonable inquiry under the circumstances, that the charity could not have obtained a better arrangement with reasonable effort, and
(ii) Formally approved the transaction.
Here, no material facts were provided to the Board and no Board discussion or approval of the transaction was made as required under Corp. Code § 5233. The record shows that the 12 defendant directors met in private and authorized Board Chair Margy Wilkinson and purported IED Bernard Duncan to hire defense counsel for PFR. Gray Decl. at ¶ 7. At their objection, Plaintiff directors were entirely excluded from the process of hiring defense counsel for PFR, and Plaintiff directors' objections to the numerous and apparent conflicts of interest generated by hiring Siegel & Yee were ignored by the defendants. Gray Decl. at ¶ 8.
Engaging in a financial relationship with a law firm that directly employs Director Fuentes constitutes an unauthorized self-dealing transaction, which is, by its nature, unquestionably against public interest. Additionally, without the participation of the financially interested director, Mr. Fuentes, the defendant directors do not have a majority with which to vote on the conflict of interest, as only 11 out of 22 total directors would be present.
Furthermore, Plaintiffs have also requested that a copy of the retainer agreement establishing that such an attorney-client relationship exists be provided to all directors. Nothing has been provided to date. Gray Decl. at ¶ 8. While there is no retainer agreement, the record does show that 1) a conflict exists, and 2) the self-dealing transaction was not approved by a majority of the disinterested directors of the Board. Thus, Siegel & Yee was not properly retained to represent PFR.
III. THE COURT IS AUTHORIZED TO DISQUALIFY OPPOSING COUNSEL
"Every court shall have the power...to control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it, in every matter pertaining thereto." Code Civ. Proc. § 128(a)(5).
The authority to disqualify an attorney stems from the trial court's inherent power "[t]o control in furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a judicial proceeding before it... (Code Civ. Proc., § 128)." Zador Corp. v. Kwan, 31 Cal. App. 4th 1285, 1292, 37 Cal. Rptr. 2d 754 (6th Dist. 1995).
IV. THERE EXIST AT LEAST FOUR INDISPUTABLE BASES FOR DISQUALIFICATION
A. DISQUALIFICATION IS PROPER WHERE THERE IS A CONFLICT OF INTEREST.
"A member [of the Bar] shall not, without the informed written consent of the client or former client, accept employment adverse to the client or former client where, by reason of the representation of the client or former client, the member has obtained confidential information material to the employment." Rules of Professional Conduct, Rule 3-310(E).
The primary purpose of Rule 3-310[(E)] is to protect the confidential relationship which exists between attorney and client, a relationship which continues to exist after the formal relationship ends. David Welch Co. v. Erskine & Tulley, 203 Cal. App. 3d 884, 891, 250 Cal. Rptr. 339 (1st Dist. 1988).
A client may seek to disqualify an attorney from representing an adverse party by showing that the attorney possesses confidential information adverse to the former client or that there is a "substantial relationship" between the former and current representation. To seek disqualification, it is sufficient to show that there was a "substantial relationship" between the former and the current representation. If the former client establishes the existence of a substantial relationship between the representations, the court will conclusively presume that the attorney possesses information adverse to the former client and order disqualification. Henriksen v. Great American Savings & Loan, 11 Cal. App. 4th 109, 113-114, 14 Cal. Rptr. 2d 184 (1st Dist. 1992).
Furthermore, where an attorney's potentially conflicting representations are simultaneous, the primary values at stake are the attorney's duty and the client's legitimate expectation of loyalty. In such cases, the rule of disqualification is a per se or automatic one. Shen v. Miller (2012) 212 CA4th 48, 56, 150 CR3d 783.
Here, the substantial relationship between Siegel & Yee's former and current representation is striking. As presented heretofore, at least four attorneys of S&Y-Messrs Fuentes, Siegel, Pyle and Yee-have served in various roles as PFR national board directors, local station board members, general counsel, IED, national elections supervisor, co-defendant of PFR and/or counsel for opposing parties in actions against PFR.
Siegel & Yee have served as counsel of record for clients, including some of PFR's co-defendants in this action, in several lawsuits against PFR, the foundation whose interests they now claim to represent, and Dan Siegel has been sued directly on behalf of PFR for actions taken against the organization's interests, as set forth below.
In 1999, Mr. Siegel represented co-defendant Lydia Brazon and others in a case against PFR. Adelson v. Pacifica Foundation, Case No. 814461-0. Gray Decl. at ¶ 20.
In 2007, while serving as PFR Corporate Counsel, Dan Siegel attempted to represent both PFR and former KPFK General Manager Eva Georgia but was removed from the case by PFR's insurance company because of a serious conflict of interest. Birden Decl. at ¶ 4.
Further, Siegel & Yee partner Dan Siegel has a demonstrated history of acting in the interests of his home station, KPFA, at the expense of PFR. In 2007, while serving in his dual role as PFR's Corporate Counsel IED, Siegel interfered with the KPFA Local Station Board election by posting a statement on the PFR website attacking the statements of a director candidate on KPFA's slate. Declaration of Casey Peters in Support of Motion to Disqualify ("Peters Decl.") at ¶ 9.
Mr. Siegel further interfered with PFR's election procedures in favor of his home station and personal election goals by firing National Election Supervisor Casey Peters and illegally breaking into Mr. Peters' home to confiscate election materials. Peters Decl. at ¶¶ 5-8.
At KPFA, Dan Siegel is a well-known partisan, associated with the slate identified as "SaveKPFA", of which Brian Edwards-Tiekert, Margy Wilkinson and Jose Luis Fuentes are also members. Gray Decl. at ¶ 14.
In 2007, Dan Siegel caused candidate turmoil in the KPFA Local Station Board election due to his self-serving and partisan responses to several opposing "People's Radio" slate statements. While serving in his dual roles as management (IED) and General Counsel, he inappropriately posted "open letters" on the KPFA website that attacked the opposing partisan slate. This intervention by management in the election process was inappropriate and in violation of the organization's bylaws and election rules. Mr. Peters ordered the posting removed from the station's website. Peters Decl. at ¶ 6.
At WBAI, despite many complaints that a candidate statement was wildly racist and sexist, Siegel, in violation of the nonprofit's bylaws, inappropriately intervened and disregarded Mr. Peters earlier disqualification of the candidate The subsequent lawsuit needlessly delayed the vote for four months, costing PFR tens of thousands of dollars, much of which is still owed. Peters Decl. at ¶ 6.
In Los Angeles, a slate filed a lawsuit regarding the delay. Los Angeles Superior County Judge Yaffe issued a tentative ruling in the case to void the election because of the delay in mailing the ballots. After the case was concluded, Dan Siegel said that "he did not care what the judge ordered" and demanded that the National Election Supervisor-Mr. Peters-conduct a recount regardless of the law and the PFR bylaws. Peters Decl. at ¶ 6.
During KPFA's 2010/2011 Winter Fund Drive, KPFA Local Station Board members Dan Siegel, Conn Hallinan, Margy Wilkinson and Mal Burnstein organized and supported a competing fund drive. The purpose was to encourage KPFA listener-donors not to support the station, but to divert contributions to a fund for the sole purpose of reinstating fellow-partisan Brian Edward-Tiekert's cancelled morning show. Gray Decl. at ¶ 21.
In 2011, listener-sponsor member Daniel Borgstrom filed a lawsuit against Dan Siegel, Margy Wilkinson, PFR and others for breach of a fiduciary duty of undivided loyalty owed to both station KPFA and its owner, PFR, for these and associated activities. Alameda County Super. Ct. Case No. RG-11-555942. On appeal, the First Appellate District affirmed the trial court's denial of Siegel's motion to strike Borgstrom's complaint and for sanctions against Borgstrom on the basis that Plaintiff did, in fact, demonstrate a likelihood of prevailing on his claims against Siegel for breach of fiduciary duties. Borgstrom Decl. at ¶ 3.
Plaintiffs have been subject to the representation-both beneficial and adverse-of S&Y in their capacities as directors of the Board of PFR. Taken together, S&Y's prior representation of PFR and, significantly, of parties in opposition to PFR, confer, with no stretch of the imagination, a substantial relationship on which the court can conclusively presume members of the firm possess confidential information adverse to both Plaintiffs and the defendant foundation.
B. DISQUALIFICATION IS PROPER WHERE ATTORNEY IS EXPECTED TO BE A TRIAL WITNESS.
Disqualification is proper when an attorney would act as both advocate and witness in the same case. Kennedy v. Eldridge (2011) 201 Cal. App. 4th 1197, 1208-1211, 135 Cal. Rptr. 3d 545. In Kennedy, the court found basis for disqualification on the prospect that the lawyer might have to testify as a witness, even though the proceeding did not involve a jury, and the circumstances would not have violated Rule 5-210 of the Rules of Professional Conduct. Here, Mr. Siegel was instrumental in drafting Executive Director Reese's employment offer letter, and Mr. Fuentes was the initiator of baseless and procedurally improper actions to terminate Ms. Reese. Gray Decl. at ¶¶ 26-29.
Both Plaintiffs and Defendant PFR have raised the formation and purported termination of Ms. Reese's employment agreement as a significant factual issue in this matter. Thus, there are at least two members of the subject firm who are likely to be called as witnesses and should be disqualified on that basis alone.
C. DISQUALIFICATION IS PROPER BASED ON EHICAL TRANSGRESSIONS EVEN WHERE THERE IS NO BREACH OF DUTY.
A party may have standing to move to disqualify opposing counsel based upon an ethical transgression other than a breach of duty. Cal Pak Delivery, Inc. v. United Parcel Service, Inc., 52 Cal. App. 4th 1 (1997) (where a disqualification was sought by a non-client when counsel for a class allegedly took a position that was in favor of his own personal interests and detrimental to the class that he represented).
The Cal Pak court concluded that disqualification was appropriate where the "unethical conduct is likely to have a continuing effect in this litigation adverse to the interests of the class he purports to represent." Id. at 10-12.
1. Dan Siegel Has Engaged in Extravagant, Unauthorized Self-Dealing to the Detriment of PFR.
On July 13, 2007, four legal offices across the country issued a press release linking their cases and talking about the consistent pattern of discriminatory behavior at Pacifica stations across the country. This pattern soared after attorney Dan Siegel became re-involved with the network in 2005 and then became its general counsel in 2006. Birden Decl. at ¶ 5. The following is a summary of matters in which Siegel & Yee was employed, without Board authorization, while Mr. Siegel was a member of the PFR Board or serving as IED.
Due, in part, to his own actions, Dan Siegel, Margy Wilkinson, PFR and others were sued in 2011 by Daniel Borgstrom for breach of their duties of loyalty to PFR. Siegel & Yee represented PFR without the requisite authorization by the Board. Borgstrom Decl. at ¶ 3.
In 2007, while serving as PFR Corporate Counsel, Dan Siegel attempted to represent both PFR and former KPFK General Manager Eva Georgia before being removed from the case by PFR's insurance provider for conflicts of interest. Birden Decl. at ¶ 4.
Mollie Paige was one of three employees at KPFK in Los Angeles who filed sexual harassment claims against former KPFK General Manager Eva Georgia. During the period when Siegel was investigating and his firm was representing the defendants, including PFR, in this action, Ms. Paige expressed distrust of Siegel given the multiple roles he was playing within PFR at the time. Birden Decl. at ¶ 7.
During the Paige case, then- and current-PFR employee Ali Lexa was called as a witness. He was deposed by Siegel himself who was acting as IED and therefore Mr. Lexa's boss, while simultaneously acting as opposing counsel for PFR and Eva Georgia. . Declaration of Ali Lexa in Support of Motion to Disqualify ("Lexa Decl.") at ¶ 4-7.
During Mr. Lexa's cross-examination, Siegel's antagonistic behavior became so egregious that Ms. Paige's attorney, Phillip Ganz, stepped in and asked if Mr. Lexa "felt intimidated or threatened by the fact that his boss was interviewing him, and by the nature of the questioning." Mr. Lexa replied that he did, in fact, feel threatened and intimidated by Mr. Siegel in his various, conflicting roles. Mr. Siegel simply responded, "That's ridiculous." Lexa Decl. at ¶ 7-8.
During the 2007 election for PFR station WBAI,when Dan Siegel was General Counsel for PFR, hundreds of WBAI listener-members and a few staff did not receive ballots. This issue was brought to the attention of Siegel and others. Instead of simply ordering that members be sent ballots, Siegel and the Pacifica National Board refused to send them. The disenfranchised members were forced to go to Court and were successful in obtaining a Temporary Restraining Order that, among other things, directed PFR to send them ballots. Birden Decl. at ¶ 6.
2. Messrs Siegel and Fuentes Have Exhibited Aggravated and Threatening Behavior, Including Threats of Physical Violence, at PFR Board Meetings.
Defendants, including Siegel & Yee employee-attorney Jose Fuentes, continue to take improper, unlawful and injurious actions counter to the interests of the foundation, including inappropriately meeting and voting on the procedures that led to the defendants' unilateral "hiring" of Siegel & Yee to represent PFR. Gray Decl. at ¶¶ 6-8. Further, Mr. Fuentes has engaged, unilaterally, in unethical conduct against the interests of his co-defendant PFR, both in- and outside of his roles as Director of the PFR Board, some of which formed the basis of a complaint filed against him with the California State Bar. Gray Decl. at ¶¶ 28-29.
During a PFR Board meeting on March 7, 2010, Dan Siegel approached Daniel Borgstrom, who had recently filed a lawsuit against Siegel and others for, inter alia, defamation, and whom Mr. Siegel knew to be represented by counsel in that matter. Siegel approached Mr. Borgstrom saying, "Daniel! You're suing me!" Mr. Borgstrom replied, "Yes I am". "Can I ask you something?" Siegel said. "No," Borgstrom told him, "you can speak with my attorney." "I'm going to speak to you anyway," Siegel said, and he proceeded to tell Borgstrom that if he did not want to listen to Siegel, he could leave. Siegel then said that if Borgstrom lost the suit, he would be liable for attorney and court costs amounting to $60,000. Borgstrom Decl. at ¶ 2.
Shortly thereafter, Richard Phelps, Borgstrom's attorney in the matter, approached Siegel and Borgstrom. Siegel then said to Phelps, "If we weren't members of a nonviolent organization, I'd slap your face." Then he challenged Phelps to step outside for a fistfight. While Phelps attempted to disengage, Siegel continued talking and gesturing with his arms and hands, repeatedly challenging Phelps to "settle things like a man." A video of this occurrence can be viewed online at https://www.youtube.com/watch?v=RjBqU7F_m9s. Borgstrom Decl. at ¶ 2.
3. Messrs Siegel and Fuentes Have Engaged In Additional Unauthorized Activity Purportedly On The Organization's Behalf.
Siegel & Yee has been used by-and possibly acted in collusion with-defendants in perpetration of the unlawful actions upon which Plaintiffs' base their complaint and ongoing grievances, including Mr. Siegel's instructional notice to Paychex purportedly on PFR's behalf, despite the fact that PFR has not hired Siegel & Yee as corporate counsel, and Mr. Fuentes's letter to Paychex directing accounting to go through S&Y before S&Y was even ostensibly hired to represent PFR in any capacity. The sum of these actions establish a bold disregard for PFR's well-
being in favor of co-defendant Fuentes's and the other defendant directors' personal interests.
D. THE COURT MAY DISQUALIFY OPPOSING COUNSEL BASED ON APPEARANCE OF IMPROPRIETY IN LIGHT OF ENTANGLEMENTS AMONG THE PARTIES, THEIR INTERESTS AND THEIR COUNSEL.
In some cases, courts have held that a litigant may have standing to assert a basis for disqualification of the opposing counsel even where there was no pre-existing attorney-client relationship between that counsel and the moving party and confidential information was not involved. In Kennedy, the court found a basis for disqualification arising from an appearance of impropriety. Where a lawyer's ethical breach is "manifest and glaring" and so "infects the litigation in which disqualification is sought that it impacts the moving party's interests in a just and lawful determination of [his or] her claims, a non-client might meet the standing requirements to bring a motion to disqualify based upon a third party conflict of interest or other ethical violation." Kennedy v. Eldridge, 201 Cal. App. 4th at 1204. Based on facts thoroughly presented heretofore, Plaintiffs have established an undeniably incestuous relationship among members of Siegel & Yee, the co-defendants, Plaintiffs and the entire Pacifica Foundation Radio family.
Furthermore, the high-profile nature of this case and the fact that threats to the defendant foundation's interests are at the heart of the action argue strongly in favor of erring on the side of caution lest the procedure act to defeat the very rights this case was brought to protect. See, In re Dresser Indus., 972 F.2d 540, 543 (5th Cir. 1992) (noting that courts should consider whether the "likelihood of public suspicion from the impropriety outweighs any social interests which will be served by the lawyer's continued participation in the case").
V. COUNSEL'S ENTIRE LAW FIRM SHOULD ALSO BE DISQUALIFIED
As a general rule in California, where an attorney is disqualified from representation, the entire law firm is vicariously disqualified as well. This is especially true where one or more attorneys from the firm are necessary or likely witnesses at trial. Henriksen v. Great American Savings & Loan, 11 Cal. App. 4th 109, 114-115; Klein v. Superior Court, 198 Cal. App. 3d 894, 909, 244 Cal. Rptr. 226 (6th Dist. 1988); Lyle v. Superior Court (1981) 122 Cal. App. 3d 470, 479, 482-483, 175 Cal. Rptr. 918. Where the court finds grounds to disqualify the attorney of an adverse party outside an attorney-client relationship, the disqualification generally extends to the attorney's entire firm. William H. Raley Co. v. Superior Court (1983) 149 CA3d 1042, 1048-1049.
For the foregoing reasons, Plaintiffs respectfully request that the law firm of Siegel & Yee and any and all attorneys employed by or associated therewith be disqualified from serving as counsel for Defendant Pacifica Radio Foundation.
DATED: May 19, 2014 AROPLEX LAW
Amy Sommer Anderson
Attorney for Plaintiffs