Kaatz vs Graham 03-05-14 | First Amendment To The United States Constitution | Summary Judgment

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RIVERSIDE, CALIFORNIA; WEDNESDAY, MARCH 5, 2014 BEFORE THE HONORABLE EDWARD D. WEBSTER THE COURT: I'll call RIC1112557, Kaatz, Beach, and

Bradley versus Graham, et al. I guess if plaintiffs' counsels could introduce themselves. MR. McCUNE: Good morning, your Honor. Richard McCune

and Michelle Vercoski for the plaintiffs. THE COURT: MR. DAGGETT: THE COURT: Okay. Hold on.

Good morning, your Honor. I'm sorry. What is your name, ma'am?

MS. VERCOSKI: THE COURT:

Michele Vercoski.

How do you spell your last name? V, as in Victor, e-r-c-o-s-k-i.

MS. VERCOSKI: THE COURT:

And who will be the person answering

questions or making on oral presentation? MR. McCUNE: I will, your Honor. My paralegal is

I would like to make one request. here, and there's a lot of documents. up to counsel table to assist? THE COURT: MR. McCUNE: THE COURT:

Would you mind if she came

I don't have a problem with that. Thank you. You all have, I think, a different idea of And since I'm the So, again, with no

how this is going to be run than my idea. Judge, I get to set the rules about that.

disrespect -- you put a lot of work into this, and it deserves to be commended, the amount of hours and time and research -- and I do commend you -- but, again, it's not particularly helpful for TRINA N. FEHLMAN, CSR, RPR, CRR 1

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me to have people restate what's already been addressed in their arguments. Because I've already come to some pretty firm And so it's rare -- I

conclusions based what I've already read.

don't say it never happens, but it's rare that oral argument in motion for summary judgment affects any change in the ultimate decision that I already have running around in my head. not be the right decision, I grant you that. can do. But, again, at this point in time, you reach a certain point, I don't know if it's the eight-hour mark or the nine-hour mark, of reading material, where you've decided pretty much this is the way you're going to decide it. Now, I'm grateful that there's a Court of Appeal, because if I'm wrong, you'll have a chance to have them correct any errors I made. And, again, this is the kind of case that I It may

But it's the best I

would expect will go to the Court of Appeal, and I'm, kind of, a waystation. I'll explain why in just a minute. So if I can have your name, Counsel. Your Honor, my name is Jon Daggett. And I represent Defendants Ricardo

All right. MR. DAGGETT:

That's J-o-n, D-a-g-g-e-t-t.

Graham, Daniel Jackson, and Larry Blackmer. THE COURT: MR. DAGGETT: THE COURT: You represent Graham -Jackson and Blackmer, your Honor. All right. Graham is the chairman of the And --

board of trustees for the PUC. MR. DAGGETT: THE COURT:

LSU, your Honor. LSU. Right. LSU. And then, Mr. Blackmer

is the head of the North American Division of the Seventh-day TRINA N. FEHLMAN, CSR, RPR, CRR 2

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Adventist Church.

And Mr. Jackson's the head of -Jackson is the president of the North

MR. DAGGETT: American Division.

And Blackburn is the vice president in charge

of education for the North American Division. THE COURT: And you are? Good morning, your Honor. Michael

MR. CONNALLY:

Connally, C-o-n-n-a-l-l-y, of Lewis, Brisbois, Bisgaard & Smith, for the Defendants La Sierra University, the Pacific Union Conference of Seventh-day Adventists, and the North American Division Corporation of Seventh-day Adventists. THE COURT: All right. Thank you.

The first order of business, I think, is some material was submitted to me which I did read, apparently stipulated. And

would you like me to sign the order so it's part of the record? MR. McCUNE: THE COURT: MR. DAGGETT: THE COURT: I would, your Honor. Any objection? No objections, your Honor. All right. Mr. McCune, if you wish to make Thank you.

an oral argument, you may do -- well, I guess it should be Mr. Daggett or Mr. Connally. Are you both going to address issues at this point? MR. CONNALLY: We would like to, your Honor. We'd be

informed by -- if your Honor has a tentative ruling, we could focus our arguments rather than going over things that would be redundant. THE COURT: No, I want you to make your argument now. Okay.

MR. CONNALLY: THE COURT:

And then what I will do is I will give you 3

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my ruling, because there will probably be a ruling at that point in time, after I hear your argument. questions how I came to it. a record as possible. I want to indicate that there's so much material that I don't think I could ever be as certain as I want to be that it's the correct ruling. But I would certainly give you my best shot And then I will answer any

And I'll try to give you as complete

and explain to you how I got to those decisions and, again, with the understanding you may well disagree with me and I don't begrudge your disagreement. MR. CONNALLY: Okay.

Thank you, your Honor.

I'd like to focus first, your Honor, on the Motion for Summary Judgment and Adjudication of Issues by North American Division and Pacific Union Conference. That motion presents its

own unique set of circumstances and is, in many respects, narrower than the other motion. separate attention. So it merits, we believe,

And even within those, North American

Division, which -- if your Honor will accept the shorthand, I'm going to refer to it as "NAD," and Pacific Union Conference, I'll refer to as "PUC." THE COURT: I will do so as well. NAD is, in particular, in a different

MR. CONNALLY:

set of circumstances and, therefore, we believe, merits its own specific ruling in that North American Division is the general church. The contentions that plaintiffs have attempted to raise

to try and create triable issues of fact don't apply to NAD, in particular, because NAD was not in the room with the plaintiffs when the resignations were requested. Much of the area where 4

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plaintiffs have attempted to create a triable issue of fact by contradicting their own deposition testimony in declarations, which we've argued separately is not permitted, does not have any effect on our argument as it relates to NAD. The essence of the causes of action involving NAD -THE COURT: Well, I think the causes of action against They're saying that NAD operated

NAD are fairly simply stated.

through Blackmer and Jackson, and that Graham was their agent. And, therefore, Graham's actions are attributable to NAD. don't buy it. But again, maybe I can cut you short. Ah. Well, we acknowledge that that's I

MR. CONNALLY: part of their argument.

But the problem with that is their whole

contention, is that the communication of the, quote, "principle," in that to the agent is all protected free speech, religious governance, and association. THE COURT: interested parties. And there's also a Civil Code section about So, again, you don't have to beat that dead

horse unless you'd really like to. MR. CONNALLY: No. We just wanted to make sure that it

merited its own separate attention because -THE COURT: If I don't do it in my ruling, then you can Can I

come back and ask me questions or supplement the comments. suggest that? MR. CONNALLY:

That makes perfect sense, your Honor.

Then the only other observation I would make at this point in time, I think the papers have laid out in great detail our position, but the key factor is that despite plaintiffs' contentions that they are not arguing religious doctrine or TRINA N. FEHLMAN, CSR, RPR, CRR 5

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religious governance, it's very clear, at every turn, that where they contend there's a triable issue of fact, it requires a Court to interject itself into adjudicating church governance and doctrine issues. For example, they -THE COURT: I understand that as well. All right.

MR. CONNALLY: THE COURT:

Because the overlying issue relating to

creating the earth in seven days as opposed to evolution was the reason that Mr. Jackson, I guess it was, met with the parties initially, before the surreptitious recording occurred at Mr. Beach's home. work-up. MR. CONNALLY: Okay. Then at this point, I think it But I So believe me, I've read more than just the

would be best if we heard -- I'll defer to other counsel.

think our papers lay it out, and I reserve only time to address issues, if need be, after we've heard your Honor's ruling. THE COURT: MR. DAGGETT: All right. Mr. Daggett?

Thank you, your Honor.

I'm not going to rehash because, as you know, NAD could only act through Jackson and Blackmer. their issues first. THE COURT: MR. DAGGETT: THE COURT: MR. DAGGETT: I'm going to address

So pretty much the same arguments. You said Blackburn or Blackmer? It's Blackmer. Right. So as the agents of North American

Division, of course, any actions NAD took would be through them. I would like to emphasize a couple items, one of them TRINA N. FEHLMAN, CSR, RPR, CRR 6

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being that in the opposition -- plaintiffs' opposition, there's a lot of discussion -- or, really, characterization of the facts to try and show that there was some kind of direct employment action, and that there was some involvement in coercion, misrepresentation, et cetera, on the part of Jackson and Blackmer. But really, at the end of the day, all they have done

is communicated the contents of the transcript and the recording to Graham, who is the board chair. And so we think as that

communication, they had -- there's no allegations, really, that there was any coercion -- no factual allegations there was any kind of coercion or misrepresentation in that. So we believe that the First Amendment certainly should apply, to protect their ability to communicate on a religious matter with the board chair of La Sierra in a matter of concern. Another point that I'd like to point out, which wasn't exactly covered in depth in the papers due to space, but the plaintiffs refer -- or actually attach the trustee handbook as one of their exhibits. And we'd give some attention -- both

defense counsel give quite a bit of attention to the provisions in the bylaws that make it clear that LSU is an Adventist organization. I'd like you to focus on a couple of things, your I'd request that you focus on a couple of

Honor, if you would.

things, one of them being the New v. Kroeger case, which makes it very clear that corporate -THE COURT: MR. DAGGETT: THE COURT: MR. DAGGETT: At 167 Cal.App.4th 800? I can confirm that for you -I have that here. Yes. There's language in that case that 7

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makes it very clear. mostly at page 820. THE COURT:

And I'm not going to read it, but it's And there's some other -Right. "As the California Supreme Court

has explained, religious corporations are merely 'permitted as a convenience to assist in the conduct of temporalities of the church. Notwithstanding incorporation, the ecclesiastical body

is still all important.'" MR. DAGGETT: Right, your Honor. And we didn't quote

the paragraph before that, but I think that also applies because the plaintiffs' focus -- really, it seems to me, all of their eggs in the basket of LSU being separately incorporated and, therefore, independent. But even the prior paragraph says that Religious

you can't look at the Corporations Code in a vacuum. corporations are different for a reason. that description.

And then it goes into

Another point is, if you look at the bylaws, like I said, it's clear it's an Adventist organization. handbook has separate provisions. church institution. And the trustee

It flat-out says LSU is a

And it says that the chair is expected to

communicate with the church about objectives of the university, and it's part of their job to try and coordinate the university with the church's mission. I don't see how that could happen if they can't communicate with the church about what that might be. distinguish between persuasion and orchestration. Plaintiffs

But really,

the only definition of that, by looking at the plaintiffs' papers, is orchestration is persuasion that someone doesn't agree with. They have the right to talk about these things under the TRINA N. FEHLMAN, CSR, RPR, CRR 8

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First Amendment.

They did so.

And to find that there could be

tort liability for that, disregarding the First Amendment, really makes it untenable for a church to run its institutions in the way that it seems federal and California law have accepted as a way a church is run. They may incorporate, but they can talk to

each other and operate towards a common mission. As to Jackson and Blackmer, again, I'm not going to rehash as to why they're not a stranger. the papers. Graham. Those are all clear in

I would like to bring up one specific issue as to

There's two causes of action as to Graham that are not One of them is the

alleged against Jackson and Blackmer.

interference with prospective economic advantage which, of course, we point out there was no lawful conduct involved which would justify that. The other, of course, breach of fiduciary

duty, that really, in its essence, seems to me impossible for a Court to wade into without determining what are these interests. It's clear that there's religious interests involved in both institutions. And the Court is being asked to look at what are

those interests, do they conflict, did Graham properly exercise his authority. I don't see how that can happen under the cases

involving the First Amendment, that it would be clear excessive entanglement. The last point I'd like to make is that punitive damages, we've done a motion for a summary adjudication on the issue. It is unopposed from the plaintiff. So I would urge that

the Court grant that adjudication as to that issue, in particular, since it's unopposed. THE COURT: I do have a question for you, Mr. Daggett. 9

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MR. DAGGETT: THE COURT:

Yes, your Honor. I'm not sure it's even necessary to get to But it seems to me the cases

the First Amendment issues here.

seem to talk about a -- and give special deferences to churches that have hierarchical organizational structure. And one of the

points is -- that you argued was that the Seventh-day Adventist does have a hierarchical authority with the General Counsel, then the North American Division, which is one of 13 Divisions? MR. DAGGETT: THE COURT: That's right, your Honor. And then, subdivide it further into the

different unions, of which there are nine North American Divisions. And then, I assume from reading other cases that

below that, there are individual parishes that are organized separately. And LSU, we'll refer to that for Loma Linda -MR. DAGGETT: THE COURT: La Sierra. -- La Sierra University, is essentially

controlled by and, for all purposes, owned by the Pacific Union Conference as opposed to the lower levels. Because if La Sierra

is dissolved or its property sold, the assets go to Pacific Union Conference. And it looks to me, also, the way the bylaws are set

up, the people are elected, that the Pacific Union Conference essentially has the majority voice in the trustees or running the board of trustees. I think 22 or 23 of the trustees have to be You have to pick some from Arizona, pick

Seventh-day Adventist. some from so forth.

But it suggests to me, in practical terms,

and, also, what I gathered from the conversations that I overheard between Mr. Graham, Mr. Beach, and the other gentleman, TRINA N. FEHLMAN, CSR, RPR, CRR 10

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that, obviously, the -- the union representatives or church representatives are fairly significant. So the question is -- with that argument, Mr. McCune says, well, in another filing involving a personal injury in Ventura County, you were stressing how separate every organization is, independent. And, therefore, it seems to be

that you're talking out of both sides of your mouth in one context or the other. So I would just like to hear you address that issue. Because that's the import I got is, here, you're talking about how hierarchical they are and how they're so related and have such a common interest, and, obviously, they have to talk. we're talking about basic First Amendment issues. say, well, wait a minute. And

And then they

Over here, you talk about how separate

they are and how unrelated they are and how, therefore, since La Sierra University is a religious institution with tenure and so forth and its own rules, it should be looked at completely separately. That's the thrust I get with that argument. So if

you could just address that for me. MR. DAGGETT: Happily, your Honor. Just a quick

clarification on the ownership issue.

The Adventist Church is In a thumbnail

unique in that it is theologically hierarchical.

sketch of Adventist history, there's a lot of suspicion of hierarchical churches, like the Catholic Church. So the

Adventist Church is kind of set up like a reverse hierarchy. MR. McCUNE: record, your Honor. MR. DAGGETT: It's in the rec- -- okay. That's fine, 11 I would object to argument outside of the

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your Honor.

I don't have a problem with that.

The point is that

it's very clear in the papers. hierarchical -- theologically.

We're talking about a -- it is a The distinctions in the pleadings

that have been submitted by plaintiff to support their case is that the church is not being inconsistent when it says it has no control over the lower -- it admits it can't hire and fire people in the lower entities. It can't direct what type of program

they're going to run in the spheres, for example, which property it may buy or things like that. But it is very clear, including

in the papers that were -- I believe, the Marquez Motion for Summary Judgment was one of the documents. It's very clear that

the church argues theologically, we're a single-unified church. The fundamental beliefs show that. who are the officers show that. The statements of the people

And on theological issues,

certainly, they have the ability to require adherence to a particular standard and act accordingly if things are not upheld to that religious standard. control. That's kind of the crux, I think, of plaintiffs' argument, is they're trying -- because of that agreement on both sides that NAD cannot operate LSU, they're trying to say that there was something wrongful in the way the individual defendants and NAD participated in this act. a religious communication. But the issue here is this is But they do not have operational

They're theologically unified, and

they certainly have the ability, per their own governing documents, to communicate about what that church mission is and how to fulfill it. THE COURT: Okay. That's fine. 12

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Mr. McCune, did you wish to be heard? MR. McCUNE: Yes, your Honor, I would. I would -- for

demonstrative purposes, I need to address -- sounds like, first, the part you don't buy, which is the directive through Graham by Blackmer and Jackson. And I'd like to provide your Honor with a

demonstrative, if I could, to go through that. THE COURT: MR. McCUNE: I started with. Okay. So I -- this may be a different order than

So on the issue as to whether this was a

directive by Jackson and Blackmer -- and I mean no disrespect by calling them their last names, but I want to make this go a little easier. through 2011. If you start on the left, your Honor, this is all Now, on May 30, Larry Blackmer provided Daniel Then Blackmer and Jackson met with their

Jackson a transcript. lawyers.

And then that -- that is just the process of getting No problem. Plaintiffs' not complaining about

the transcript. that at all.

That evening, Daniel Jackson calls past midnight, at He calls Blackmer twice to complain about this transcript

and sends an e-mail that says that he is very angry and there would be more to come later. So he then -- he's, then, in California. He then

provides the transcript in person to Mr. Graham, and provides it with instructions that this is an employment matter, and this is something that should be dealt with by La Sierra. So if

that's -- as the defense would describe it, that was -- that was the end of the involvement, that Jackson may have gotten worked up, but he provides a transcript to Graham. And then both the 13

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declarations of Graham and -- and Jackson are -- well, essentially, at that point, it was now Graham's job to figure out what to do with the transcript. But the evidence shows something very different than that, your Honor. On the very next day, twice, Jackson calls

Graham, which is in Exhibit 15 and then the newer Exhibit 39. The following day, June 3, Jackson again calls Graham. gotten the telephone records, so we know this. it's quiet. On the 6th of June, Jackson then, who now says that he's completely at peace and he's all comfortable and Graham's handling it, provides a transcript to one of his employees at the NAD and asks him to do something and to review it and make recommendations, which that employee does and provides to him on the 7th. That same day, Jackson again e-mails Graham. The We've

Over the weekend,

following day, Jackson calls Graham, which is now the 8th. On the 9th, Jackson once again calls Graham. They then

set up a conference call between Graham and Blackmer, counsel. And that's where we believe that the instructions to Graham were finalized. Then Graham goes forward the next day. If you were to listen and read the argument made by the defense, there would be nothing in between Graham provides a transcript to -- or Jackson provides a transcript to Graham and Graham terminates plaintiffs. than just passive action. But, in fact, there is much more

This -- clearly, the inference that

can clearly be drawn from the activity initiated by Jackson supports that there is a disputed fact as to whether this was TRINA N. FEHLMAN, CSR, RPR, CRR 14

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Graham's action, taken alone on his own volition, or if this was directed by Jackson. That -- the final piece of that puzzle is immediately after this meeting. The first thing that Graham does, he calls And Jackson gives him a "good

Jackson to report how it went. boy."

We believe that those facts support an inference that this was action not initiated or completed by Graham but, instead, by Jackson. The other telling aspect of that was the decision to exclude the -- the administration of the university and the non-church board members from that. The issue on the independence, the Court describes this as a personal injury matter, the Ben case. And where it is

different than that, in our view, is -- we're not saying the cases are the same. But what we are saying is that the

admissions and declarations made in that case are relevant. They are -- the church defendants now have a -- a motivation to say that they are one. But when they had a

different motivation -- if you -- Exhibit 11, if I could read from that, your Honor, it states -- paragraphs 14 through 17. And this is a case involving a Seventh-day Adventist institution, Caribbean Union, that's in the same position as La Sierra University. The declaration provided by the church defendants

was the subordinate organizations are independent, are nonprofit, educational, charitable, or religious institutions. These

entities each maintain a separate legal existence, and each is responsible for its own legal obligations. TRINA N. FEHLMAN, CSR, RPR, CRR 15

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The issues related to other cases where the church owns and controls these institutions are much different than that. And, in fact, that could be no more highlighted than the church -- Seventh-day Adventist Church actually owns and operates three institutions, one of them that's ten miles away from here, which is Loma Linda University. institutions. It has chosen to own those

It has chosen to set these institutions up as

separate institutions. THE COURT: MR. McCUNE: La Sierra University. Does the PUC own La Sierra University? It does not. It does not contend it owns

It contends it has potential ownership It has

interest if, in fact, La Sierra folds its -- its doors. no right to encumber that land. with that land. THE COURT: Well, essentially, if the board of

It has no right to do anything

trustees, 22 out of 23 which have to be members of the Seventh-day Adventist Church, decides to end the existence of Loma Linda -- La Sierra University, they could do so. And the

property then becomes the assets of the Pacific Union Conference; correct? MR. McCUNE: THE COURT: MR. McCUNE: That is absolutely correct. All right. Go ahead.

But that's different than PUC having And I might add

ownership interest in it -- the ownership of it.

that the board structure was set up so that the Adventist voice would be heard within the university. But -- but this isn't a

subsidiary, like in -- Toyota has a subsidiary for USA, where it's a separate legal corporation, but the subsidiary answers to TRINA N. FEHLMAN, CSR, RPR, CRR 16

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the parent corporation, has full control.

There -- it's

undisputed here from all parties that none of these defendants, absent La Sierra University, has the right to hire, fire, demote, supervise any of the employees of La Sierra University. THE COURT: Well, except for the president and the

other people in administration, they do. MR. McCUNE: THE COURT: directly. MR. McCUNE: The board of trustees can, through Of La Sierra University. Correct. The subordinate trustees can't,

consultation with the president. THE COURT: No, no, no. The board of trustees has

direct responsibility for evaluating the president and the administration of the church. that you submitted to me. MR. McCUNE: And that is -- that is correct, but with I think that is in the handbook

consultation with the president. THE COURT: No, not -- why would you consult with the It doesn't

president if you are going to evaluate him himself? say that.

It does say about faculty and tenure and so forth, But in terms of Let me

they're to consult with him and he's to act.

reviewing his administration, I think it's different. see. Which -- somebody submitted the trustee -MR. McCUNE:

The trustee handbook, your Honor, is

Exhibit 2 to Plaintiffs' Evidence of Support of its Motion for Summary Judgment. one of the issues. THE COURT: Hold on. Let me find it first. 17 And I would -- it's on page 4. Well, that's

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Does anybody have a copy of the trustee's -MR. DAGGETT: or the bylaws? THE COURT: MR. DAGGETT: right away. Yes, trustee's handbook. Yes, your Honor. Because I could find it You're looking for the trustee's handbook

Because I made a copy, the overview of trustee's And I also made a copy -- I don't know what I

responsibilities.

did with it -- that one section. MR. McCUNE: It's Section 6.9 of the bylaws, your

Honor, which is Exhibit 1 to the plaintiffs' -THE COURT: Right. Then there is also a B, at page 4,

which says, The power of the trustee in the operation of the university is limited to policy-making level. The involvement of

the trustee in operational matters is strictly -- is restricted primarily to establishing standards for evaluating, then engaging in evaluations of the university president and university administration. MR. McCUNE: THE COURT: Correct. That sounds to me almost like an

independent authority they have. Now, I would assume they'd want to talk to the president about those things. independent responsibility. MR. McCUNE: Your Honor, how I -- I believe that those But it sounds to me like that's

are reconciled is that the board of trustees is responsible for supervising the president. The president is responsible for

supervising and managing the campus and making recommendations to the board. The ultimate authority is with the board. TRINA N. FEHLMAN, CSR, RPR, CRR 18

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THE COURT:

What happens if there's a concern of

misconduct by the president or other people in the administration since -- as I think one of the gentleman's deemed, doesn't the board, through the chairman of the board, have the independent right to do that investigation under that section? MR. McCUNE: independently. happened here. THE COURT: MR. McCUNE: All right. You may continue. I would say that the board chair does not, And that's not what

The board, as a whole, does.

The -- the fact that separates this case

from the other cases that deal with First Amendment issues -- and I understand that the Court has had a more preliminary point on this than that. But there are separate board bylaws, there's a And the

separate board, there's a separate administration.

Seventh-day Adventist Church has -- owns and operated its own universities. And then you combine that with -- the church defendants have taken positions -- specific positions in declarations that are admissions and useful for this case. That, in fact, the

educational institutions are independent makes this very different. The -- the issue that -- the next issue I'd like to address for the Court is the apparent -- the comment the Court made as to "stranger," that, I assume, is taken out of the Applied Equipment Corporation. It -- as I attempted to interpret

the Court's comments was that if, in fact, the church defendants had an interest in La Sierra University, then that provided them the cover to have these kind of communications that I've been TRINA N. FEHLMAN, CSR, RPR, CRR 19

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discussing.

Maybe that's putting words in the Court's mouth, but

that was my interpretation of it. And I take that from some of the language that is in Applied Equipment Corporation regarding what constitutes interference with a contract from another company. And the

Applied Equipment Corporation was -- which is a Supreme Court case from 1994, was the Court was dealing with the issue could a contracting party be liable for interference of the contract that it is a party to? And what that Court said was, no, only strangers to that contract could. But as pointed out in Woods v. Fox

Broadcasting, which is a 2005 case, which is 129 Cal.App.4th 344, that -- that Applied also used the word "stranger" interchangeably with noncontracting parties and third parties, and that, specifically, the Applied case had not considered when a noncontracting party that had some interest -- whether that would prevent it from going forward with that. The other case that -- that -- and your Honor, I -this may be in our opposition and it might not be, but this was something raised heavily on the reply, the Applied Equipment case, is Powerhouse Motorsports versus Yamaha Motor Corporation, which was just decided in November of 2013, which is 221 Cal.App.4th 867. dealer. And that involved a manufacturer and its

And there was a dispute as to the contract situation.

And the claim -- the defendant's claim was because of this relationship between the manufacturer and the dealership, that they were not strangers to the contract, that they had an economic interest in the contract. So therefore, they could not 20

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be strangers to the contract under Applied.

The Court

specifically rejected that argument, and said that that's not what Applied Equipment Corporation said. And it relied on

Woods v. Fox Broadcasting, the case that I just listed, for -for the indicated. And it -- it -- in a case -- there is not a case that says having an interest in one of the parties gives that party the right to interfere with the contracts. of Applied Equipment Corp. That is a misreading

And that's a misreading of Applied

Equipment Corp. that both Woods and the Powerhouse Motorsports Group, in cases in 2005 and 2013, have made clear. The line that the defendants are attempting to walk by saying, we are all one in theology, but we are not one in our legal relationship between one another except when we might be sued for the conduct of one of the other entities, is one that is not found in any of the other cases and is not found in the law. The right to have ownership and control are what is relevant in vicarious liability cases. The same thing that has provided them

the ability to escape liability for Caribbean Union College or its publishing house or its conferences are (sic) exactly the same thing that -- that provides them the position that they are now, which they should have to answer, at least to a jury, on these issues of fact as to whether there's responsibility. They

are -- they've taken a position that we want -- we don't want any of the responsibility for La Sierra University. any of the legal responsibility. We don't want

But yet, when we don't like

what they're doing, we want to bypass that and take over control of La Sierra University. TRINA N. FEHLMAN, CSR, RPR, CRR 21

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The issue as to whether they did that is a -- is a question of fact that this Court is not in a position to answer, as it is a triable issue of fact. The defense didn't talk about whether the resignation letters were properly obtained. to hear me on that. I don't know if the Court wants

But there's some indication that the issue

as to whether the use of that recording was wrongful had been decided in the low -- in the demurrer action adverse to plaintiff, and that is not correct. The -- the plaintiffs were What

allowed to keep the wrongful language in the allegations.

they were prevented from doing is making a claim under the Penal Code that requires intentional action. The use of a private conversation that was recorded without information and knowledge is, in fact, an element that the Court needs to consider as to whether these resignation letters were voluntary. That is in connection with the issues as

to coercion and misrepresentations that include that there was no advance notice of the reason for the meeting. Mr. Graham proudly

described it as he sprung it on the plaintiffs, that the -Mr. Graham would not give a copy of the transcript not only to the -- to the plaintiffs, but to the president of the university, who was there. And I might add, your Honor, that going back to the issue as to what if the board had an issue with the administration, there is no indication that the board and Dr. Graham, in particular, had any reason to believe that there was an issue with Randal Wisbey, the president of the university. He was not one of the four people on the -- the recording. TRINA N. FEHLMAN, CSR, RPR, CRR 22 The

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reason to bypass him did not have anything to do with he was involved in the situation. The -- the indication, by Dr. Graham, that if -- if the three -- the three plaintiffs did not sign the letters of resignation, he would release this private recording. And I

think the most egregious, at least from my viewpoint, is not giving these three employees, that had been at this institution for over 100 years, the weekend to think about it. This

transcript had been out for almost -- the defendants were aware of this transcript for close to 45 days. There was absolutely no They chose not

reason that it couldn't have waited the weekend.

to do that because they wanted to put the pressure on the plaintiffs to sign this letter of resignation without the information, without counsel. The First Amendment issues, there is not a case, and there's not any of the cases cited by the defense, where an institution that is affiliated but not owned or controlled is found to be in a position of the sameness with the church, in order to make a First Amendment argument right -- or argument. The New versus Kroeger case cited by defense is -- is so far off point. It is -- it was a case in which there was a

fight between congregation members who were on the board as to control of the institution. get involved in that. That Court said, we're not going to

But the case of Sacramento Sikh Society

Bradshaw Temple versus Tatla, 219 Cal.App.4th 1224, specifically said, "The fact that issues of church membership may fall within the purview of church authorities does not mean that is always the case. The question is whether resolution of the membership TRINA N. FEHLMAN, CSR, RPR, CRR 23

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issue requires reference to church doctrine rather than neutral legal principles." And that's where I'd like to finish here, your Honor, is this talk about creation versus evolution. This Court is not

being asked to make a decision as to applying the fundamental beliefs of the Seventh-day Adventist Church. That is a red This

herring in the most large -- in its most significant way. has to do with whether these employees, none of which were

ministers, none of which were teaching religion, were required -that had to answer to the defendants, outside of La Sierra. issue of answering to La Sierra is different. Finally, just as a housekeeping matter, Counsel indicated the plaintiffs had not addressed punitive damages and had filed a nonopposition. I would invite the Court to look at And there wasn't The

page 19, line 24 through 25 of our opposition.

specific time spent on that, because the fact section dealt extensively with the facts that plaintiffs support -- that, I believe, supports that claim. So unless the Court has any questions of me. THE COURT: sat down. I did have a couple of questions before you

I assume that Leonard Darnell's deposition was taken? MR. McCUNE: THE COURT: It was, your Honor. Did Jackson and Blackmer know their meeting

with the plaintiffs was being recorded? MR. McCUNE: Honor, that they knew. THE COURT: I have no reason to believe that, your I don't believe that they knew. So then Mr. Darnell was surreptitiously

recording the conversation he had with Mr. Jackson and TRINA N. FEHLMAN, CSR, RPR, CRR 24

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Mr. Blackmer?

Isn't that a violation of the Penal Code? I'm unclear of what the Court is referring

MR. McCUNE: to. I don't -THE COURT:

Well, if Mr. Darnell is recording the

initial meeting had between the plaintiffs and Mr. Blackmer and Jackson, unbeknownst to the people there, Jackson and Blackmer, isn't that potentially a violation of the Penal Code? MR. McCUNE: Whether it is, that would be on But I might add that that's a

Mr. Darnell, who's not my client.

public meeting with, literally, I think, hundreds in attendance. So I -- I don't think the expectation of privacy would apply. THE COURT: recorded that meeting? MR. McCUNE: Honor. THE COURT: And why did he send it to the Spectrum I don't know the answers to that, your And what did he say was the reason why he

website, which was accessible to the public generally? MR. McCUNE: THE COURT: MR. McCUNE: Related to the faculty meeting? Uh-huh. Based on what he has said, it related to

that there was widespread interest in the Seventh-day Adventist community about what was happening at La Sierra University. THE COURT: All right. So there is no indication that

they wanted to get their side out and, essentially, publicize the controversy, to gain whatever positional benefit they would get from that. MR. McCUNE: they, your Honor. I would take -- I would take exception to

If you're talking about Mr. Darnell, I don't TRINA N. FEHLMAN, CSR, RPR, CRR 25

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know what Mr. Darnell's motivation was.

But to lump Mr. Darnell

in with my clients is not -- is not something that happened here. THE COURT: laughing together -MR. McCUNE: THE COURT: MR. McCUNE: That they had a --- at Mr. Beach's house. Well, I would say that the description of Well, except that they were drinking and

that as drinking and laughing together is not quite accurate either. THE COURT: I'll look through it and I'll explain to

you from the transcript where that appears, and we'll talk about that later. I'll go ahead and address the rest of this. All right.

First thing is, I'm going to read from the work-up that was done. The work-up was done by Erin Orzel, who's here in court, and I'm not going to take credit for it. at the authorities. I went through it and I looked

And I agree that she writes and expresses

herself, more often than not, better than I can, and she's obviously brighter than I am. And I appreciate that. She's

probably brighter than almost anybody that does this calendar. So I want to express to her thanks. I've disagreed with her in But again, So I can't

the past, and I want to indicate that, to be sure. the work she did here, I thought, was extraordinary. say it any better.

So I'm going to state her work-up almost

verbatim at certain parts. When that's done, I will also then go through what my general impressions are about this case, because I think this case is extraordinarily ill-advised for a lot of different TRINA N. FEHLMAN, CSR, RPR, CRR 26

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reasons.

But I will be granting the four motions for summary I

judgments and adjudications on all issues, as requested.

believe that then makes it a matter of law, and the Court of Appeal will independently review the matter. And so,

essentially, I am a waystation on the way to the Court of Appeal, which does not bother me one bit. They have more time, they have

more resources, and they have the benefit of three justices to talk the matter over, to come to a more proper decision, if I'm wrong. Whatever they decide, I will certainly go along with. I would guess, given the length of the trial, what's happened here, that the attorneys' fees might be approaching as much as a quarter of a million dollars. case would end at this point. So I can't imagine the

So I would think that since the

briefing is done, the issues are clear, it's a matter of law, there shouldn't be a whole lot of additional cost to have the Court of Appeal review my decision. parties to do so. At any rate, I'm reading now. point. This is Ms. Orzel. And she makes this valid I would encourage the

She says, quote, "In large, though,

nonconstitutional doctrines are sufficient to dispose of these motions, and," quote, "'a fundamental and longstanding principle of judicial restraint requires that courts avoid reaching constitutional questions in advance of the necessity of deciding them,'" citing Santa Clara County Local Transportation Authority versus Guardino, spelled G-u-a-r-d-i-n-o, 11 Cal.4th 220, at 223. So she did make a conscious effort to avoid the First Amendment wherever possible. And this is what she writes -- and

I agree -- "As indicated above, all parties but LSU argue that TRINA N. FEHLMAN, CSR, RPR, CRR 27

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plaintiffs' claim against them are barred by the common interest privilege, which states that -- which states that privilege attaches to," quote, "'a communication, without malice, to a person interested therein, (1) by one who is also interested, or (2) by one who stands in such a relation to the person interested as to afford a reasonable ground for supposing the motive for the communication to be innocent, or (3) who is requested by the person interested to give the information.'" And that's Civil Code Section 47(c). "This privilege is most

often invoked in cases in which an employer talks to current employees about the behavior or reasons for discipline of a former employee. (See Civil Code Section 47(c), Deaile,

D-e-a-i-l-e, versus General Telephone Company, 1974, 40 Cal.App.3d 841, 846.) In fact, the opposition's sole argument

against application of this privilege is that it's been reserved for employers who want to," quote, "'preserve employee morale and job efficiency,'" citing to the opposition to the MSJ/MSA by PUC and NAD at page 15, line 20. "To the contrary," quote, "'the common interest of the members of a church in church matters is sufficient to give rise to a qualified privilege to communications between members on subjects relating to the church's interest.' (Brewer versus

Second Baptist Church of Los Angeles, 48" -- I'm sorry -- "1948 case, 32 Cal.App." -- sorry -- "32 Cal.2d 791, 796, (Brewer).) There appears to be no dispute that Graham, who is the president of PUC and chair of LSU's board of trustees, Jackson, who is the president of NAD, and Blackmer, who is NAD's vice president of education, count as members of the church for these purposes. TRINA N. FEHLMAN, CSR, RPR, CRR 28

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Plaintiffs completely ignore the possibility that Graham, Blackmer, and Jackson communicated with each other about plaintiffs out of concern that the recording, which had gone public, would damage the church because it appeared to contain proof that plaintiffs had violated church tenets. In fact,

plaintiffs don't dispute that Jackson has the right to offer opinion and counsel to LSU. statement, Fact Number 38.)" In fact, I think I read somewhere that the church -they called it suasion -- I never heard of that word, but I guess it's short for persuasion, s-u-a-s-i-o-n -- is common. So it's (Response to NAD and PUC's separate

inconceivable to me that if you have a recording like this, that the president of the North American Division would not be communicating with everybody connected with the church about what's going on here and what's the right thing to do. And I

don't see why you wouldn't expect the North American Division to -- to try to persuade and make its position clear as to what they think the right thing should be to do. the time within areas of concern to them. People do that all And I would think that

this recording would be a matter of legitimate concern to everybody connected to the Latter -- to the Seventh-day Adventist Church. But I'll continue. "In my view, NAD and PUC meet their initial burden of proving the common interest privilege absolves them of liability on any claim alleging communications as the basis for liability because they offer declarations from Jackson, Graham, and Blackmer, who assert that they became involved with the transcript because Blackmer obtained it, was dismayed at what he TRINA N. FEHLMAN, CSR, RPR, CRR 29

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heard, and passed it on to Jackson, who got upset and gave it to Graham, who also became dismayed and decided to request resignation letters from plaintiffs." That's Graham's

declaration, paragraph 7, page 255 of electronic copy of exhibits accompanying NAD and PUC's motion; Jackson's declaration, at paragraph 7 to 10, pages 262-263 of electronic copy of exhibits; Blackmer's declaration, paragraph 6, page 266 of exhibits. "I

don't think plaintiffs met their opposing burden for the reasons set forth below. "Plaintiffs offer no reason of any kind why the conversations these individuals had with each other about the recording aren't subject to the common interest privilege, even though the conversations were motivated by a fear about the effect of the recording's release upon the church. Instead, they

attempt to show that Blackmer and Jackson did more than just hand the matter over to Graham so he could decide how to handle disciplining plaintiffs, and alleged that they, in fact, ordered Graham to get rid of plaintiffs. In my view, this does no more

than to highlight the extent to which Blackmer and Jackson were concerned about their church, since all plaintiffs arguably show is that they made efforts to have the recording transcribed and that Jackson really, really wanted LSU to start complying with church doctrine regarding teaching creation. Plaintiffs offer

testimony from Robert Andringa," A-n-d-r-i-n-g-a, "Ph.D., who at some point consulted with some of the parties about the propriety of LSU's actions, because he opines that Graham acted improvidently in requesting resignations, but they make no effort to show why this lone opinion means that Blackmer, Graham, and TRINA N. FEHLMAN, CSR, RPR, CRR 30

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Jackson weren't concerned church members who wanted to address public perceptions of impropriety. "The common interest privilege affects the following causes of action in the following ways. "The fifth cause of action for interference with contract is alleged against PUC, NAD, Graham, Blackmer, and Jackson. Plaintiffs allege each of these defendants disregarded

LSU's corporate structure and caused LSU to breach their employment agreements. 153. TA -- Third Amended Complaint, paragraph

As to Blackmer and Jackson, however, the most plaintiffs

have alleged is that they talked to Graham about their concerns. As set forth above, these comments can't create liability to the -- due to the common interest privilege. I recommend

granting the motion as to Blackmer and Jackson as to -- and as to NAD, because it's only alleged vicariously liable for the actions of Blackmer and Jackson. "Graham is a bit more complicated. I think there's

probably something to the idea that Graham's act of demanding resignations goes beyond what he said, such that the common interest privilege can't apply. However, as set forth below, I

think Graham's actions are subject to managerial privilege, which generally relieves employees with managerial authority of liability for inducing breach of an employment contract by the employer. (See Halvorsen, H-a-l-v-o-r-s-e-n, versus Aramark

Uniform Services, Inc., 65 Cal.App.4th 1383 at 1391, 1392.) Plaintiffs' opposition brief insists Graham stood to individually benefit from his actions, such that he can't claim protection from managerial privilege. (See, namely, Graw, G-r-a-w, versus 31

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Los Angeles County Metropolitan Transportation Authority, (C.D.Cal. 1999) 52 Fed.Supp.2d 1152.) little evidence on this point. However, they present very

The most they offer is that he

was up for renomination as president of the PUC, such that he had an incentive to follow his superiors', (i.e., Jackson and Blackmer's) orders. Even if Jackson was sitting on the committee

charged with deciding whether to renominate Graham, there's no evidence that Jackson or Blackmer were, in fact, Graham's superiors. The bigger problem I have is that this line of

argument ignores the fact that Graham submitted plaintiffs' resignations to the LSU board, which then accepted them. resignations, then, weren't just an act taken by Graham, individually. I see no evidence that Graham's decision to demand The

resignations was an act of self-interest rather than an act motivated out of concern about the effect of what was said on the recording on the university and/or church. I recommend granting

the motion as to him and PUC, which is allegedly vicariously liable for Graham's actions, due to the managerial privilege. This leaves no defendants remaining on this cause of action. "The sixth cause of action for interference with prospective economic relations is premised on the theory that the PUC" -- I'm sorry -- "that PUC and Graham exerted improper influence over LSU and thereby interfered with its economic relationship with plaintiffs. paragraph 162.) (Third Amended Complaint,

Because Graham is PUC's president, I see no It looks like PUC can"

allegation about any other PUC employees.

act -- I'm sorry -- "it looks like PUC can only be vicariously liable if Graham is liable. Based on the above discussion, any 32

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attempt to make Graham liable for discussing the recording with plaintiffs or any church member is barred by the common interest privilege. "I'm aware of no authority allowing the Court to extend the managerial privilege outside the context of a cause of action for interference with contract. This cause of action may not be

barred by any immunities, but it fails for an independent reason. The elements of a cause of action for interference with prospective economic advantage are, quote, '(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the plaintiffs' (sic) knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant.'" And that's citing Korea Supply versus Lockheed "In addition, a

Martin Company, 2003, 29 Cal.4th 1134, at 1153.

plaintiff must allege some act by the defendant that was, quote, 'independently wrongful,' (Ibid., et seq. page 1158.) "Quote,

'An act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard,' end quote (Ibid., at 1159). Here, plaintiffs make much of the fact that

Graham, by himself, lacked authority to terminate them because only LSU's board could do that. The problem is that they point

to no prohibition on his asking them to resign and then submitting the resignations to the board for approval. In other

words, there's no proof that Graham actually disregarded LSU's TRINA N. FEHLMAN, CSR, RPR, CRR 33

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corporate structure because there's no evidence he did something he wasn't authorized to do. I don't see an act that's wrongful I recommend granting the motion

by independent legal standard.

as to the sixth cause of action for interference with prospective economic advantage. "The seventh cause of action for inducing breach of contract is based on the theory that PUC, NAD, Blackmer, Jackson, and Graham met with Wisbey, LSU's president, and, quote, 'persuaded him,' end quote (sic), that it would be to LSU's advantage to sever its ties to plaintiffs." Complaint, paragraph 167. That's Third Amended

"As pled, this cause of action falls

squarely under the common interest privilege because it seeks to hold defendants liable for what they said out of concern about the recording and plaintiffs' continued employment. I recommend

finding the seventh cause of action to be barred by the common interest privilege. "The eighth cause of action for intentional infliction of emotional distress is alleged against all defendants and alleges they engaged in outrageous behavior by publishing the recording and using it to fire or threaten to fire plaintiffs. Again, the Third Amended Complaint, at least in part, attempts to create liability based on what they said. barred by the common interest privilege. Any such claim is To the extent to which

the plaintiffs also allege defendants acted outrageously by discharging them, as separate from talking about them, they have to show that this action was, quote, 'extreme and outrageous,' end quote." Cite: Alcorn versus Anbro Engineering, Inc., 1970, "I have a hard time seeing how 34

2 Cal.3d 493, at 497, 498.

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plaintiffs meet this definition because, as set forth above, they've presented no reason why Graham was prohibited from asking them to resign. It is also extremely hard for me to divorce the

act of demanding resignations from the context of a discussion about the propriety of allowing plaintiffs to continue in their positions at LSU despite their divergence with the church about evolution and the acts either committed in or admitted to in the recording. There's also substantial overlap here with the First Because there's enough of a

Amendment defense I discuss below.

connection between what was done and concern for the church to justify applying the common interest privilege to what the defendants said, I have a hard time saying that any of what they did qualifies as extreme and outrageous. I recommend granting

the motion as to the intentional infliction of emotional distress claim, whether because of the common interest privilege or the First Amendment doctrines discussed below. "Finally, the ninth cause of action is for breach of fiduciary duty against Graham solely. Plaintiffs allege he

committed this tort by ignoring LSU's structure and disciplinary guidelines and allowing his conflict of interest to cloud his judgment about what was good for LSU, as opposed to what was good for the church. Plaintiffs make much of the fact that LSU is a

religious corporation that's separate from NAD and PUC, but they ignore that the bylaws say that LSU is, quote, 'operated by its board of trustees as an integral part of the PUC,' and that the trustees are required to, quote, 'guide the university wisely in fulfilling its mission in higher education in the context of the educational, occupational, moral, spiritual, and social needs and TRINA N. FEHLMAN, CSR, RPR, CRR 35

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challenges of the Seventh-day Adventist Church,' end quote, and to carry out their duties 'consistent with the policies of the PUC.'" And that's PUC and NAD Exhibit Number 2, paragraph 6.9, "In addition, officers of

6.9w, page 22, 23 of electronic copy.

PUC and other church organizations are required to be LSU board members." Again, ibid., at page 6 -- I'm sorry -- ibid., And Madam Reporter,

paragraph 6.2, page 21 of electronic copy. I'll give you this when I finish.

"Finally, plaintiffs don't

dispute that Blackmer's duties include acting as advisor to Seventh-day Adventist universities in North America, including LSU." And that's response to PUC and NAD's separate statement, "I again see no acts by Graham that actually

Fact Number 29.

exceed his powers and responsibilities as the chair of LSU's board. action. "If the Court agrees with the above analysis, then no claims remain against NAD, PUC, Graham, Blackmer, and Jackson. This renders moot the individual defendants' attacks on the request for punitive damages because there are no surviving causes of action to support an award of such damages." And she goes on to discuss number two. want to thank you personally, Ms. Orzel. Let me read. "With the exception of the eighth cause And again, I I recommend granting the motion as to the ninth cause of

of action for intentional infliction of emotional distress, which is alleged against all defendants, none of the above-discussed causes of action is alleged against LSU. I recommend granting

its motion as to the intentional infliction of emotional distress claim for the reasons stated above (i.e., I don't see any conduct TRINA N. FEHLMAN, CSR, RPR, CRR 36

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that qualifies as extreme and outrageous and, as described below, the Court lacks jurisdiction over any inquiry into whether the defendant -- the individual defendants stated concerns about the recording were sincere.) "The causes of action against LSU are the first four, for breaches of express or implied contract, constructive breach of employment contract, and breach of implied covenant of good faith and fair dealing. Plaintiffs' main opposition to the First

Amendment argument is that LSU is not a church or, because it's organized separately, a church-run school. They also complain

that the motions improperly ask the Court to revisit its ruling on demurrer, but this is a speaking motion on which the Court can look at extrinsic evidence. The work-up on the demurrer was

quite clear that the Court might need to look beyond the pleadings to decide the First Amendment issue, such that resolution needed to wait for a later date. "First, it's important to note that, as the replies argue, this is not about what's known as the ministerial exception. The lead case on that doctrine is now Hosanna,

H-o-s-a-n-n-a, dash, Tabor Evangelical Lutheran Church & School versus Equal Employment Opportunity Commission, 2012, 132 S.Ct.Rptr. (sic) 694, in which the Court held that the exception operates as an affirmative defense in favor of religious employers sued under employment discrimination laws. (Ibid., see

page 699, found at 705-706; see also Henry versus Red Hill Evangelical Lutheran Church of Tustin, 2001, 201 Cal.App.4th 1041, at 1049, 1050 [exception to the Fair Employment and Housing Act, in parentheses, (FEHA)]. And then there's Parker-Bigback 37

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versus St. Labre, L-a-b-r-e, School, 2003.

That's 301 MT 16, at

20 [exception to state law prohibiting discrimination in employment].) Here, there are no statutory employment claims.

Instead, plaintiffs ground their causes of action against LSU in contract and the implied covenant of good faith and fair dealing. Hosanna-Tabor, supra, explicitly held that it was 'expressing no view on whether the exception bars other types of suits, including actions by employees alleging breach of contract or tortious conduct by their religious employers.'" S.Ct.Rptr. (sic) at 710. And that's 132

"I've found no authority indicating

that the ministerial exception is the only framework for analyzing claims -- for analyzing claims based on that -- I'm sorry -- claims nonstatutory, based on employment. "What is at stake here, and where I found authority, is the extent to which the Court has the power to decide questions relating to church doctrine. Even some of the statutory

employment cases provide insight into this more global question. For example, in Equal Employment Opportunity Commission versus Mississippi College, 5th Cir. 1980, 626 Fed.2d 477, the Court considered whether Section 702 of Title 7, which makes the statutory scheme inapplicable to certain religious employers, prevented enforcement of a subpoena in an action brought by the Equal Employment Opportunity Commission" -- that's the EEOC -"after it received allegations that a college owned and operated by the Baptist 'Convention' had a practice of discriminating against African-Americans and women in employment." Fed.2d at 484. That's 626

"The college argued it had refused to grant

full-time employment to particular female employee -- to a TRINA N. FEHLMAN, CSR, RPR, CRR 38

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particular female employee not because she was female, but because she wasn't a Baptist, and that the Court lacked jurisdiction to say the school couldn't enforce a policy of preferring Baptists in hiring decisions. The Court wrote:

"'We conclude that if a religious institution of the kind described in s 702 presents convincing evidence that the challenged employment practice resulted from discrimination on the basis of religion, s 702 deprives the EEOC of jurisdiction to investigate further to determine whether the religious discrimination was a pretext for some other form of discrimination. This interpretation of s 702 is required to

avoid the conflicts that would result between rights guaranteed by the religion clauses of the First Amendment and the EEOC's exercise of jurisdiction over religious educational institutions." And it's ibid., at 486. "In other words, not

even allegations of pretext will evade the jurisdictional bar the First Amendment poses when it applies. "Plaintiffs' opposition relies exclusively on Mississippi College and Winbery versus Louisiana College, 3d. Cir. 2013, 124 So.3d 1212, in both of which the Court found that the sectarian nature of the schools that employed the plaintiffs meant that some portion of the First Amendment defenses asserted there fail. (Mississippi College, supra,

626 Fed.2d, at pages 486, 488; Winbery, supra, page 1215 at 1218 (sic).) Oddly, Mississippi College performs this analysis under

the establishment clause, while Winbery does so under the free exercise clause, but this particular type of confusion isn't unusual. TRINA N. FEHLMAN, CSR, RPR, CRR 39

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"What plaintiffs omit, and what the replies point out, is that both Winbery and Mississippi College actually support application of the First Amendment defense in this case. Mississippi College arises in an odd context because it's really a discovery dispute. The opinion's disposition was an order of

remand to the District Court for determination of, among other things, whether the part-time teacher had been refused the full-time position because she wasn't a Baptist. If so, the

Court agreed that Section 702 of Title 7 would apply and the Court would lack jurisdiction." 489. That's 626 Fed.2d, at page 486,

"An elucidating footnote offers a hypothetical and

indicates that it would be permissible for the college's practice of preferring Baptists to disparately" -- I read this part, and I think the point was that if the college essentially only recruited at white Baptist schools to avoid hiring blacks, there might still be a litigation. But if, essentially, they fairly go

to all Baptist schools and hire just Baptists, it then would be outside the jurisdiction of Section 702. But I'll continue:

"Even though Section 702 and Title 7 aren't at issue here, the same reasoning underlying the above analysis applies here. It's

very much worth noting that the Court reached these conclusions despite the fact that it emphatically found that the college was sectarian. "Similarly, in Winbery, supra, the Court held that while the free exercise clause of the First Amendment poses no bar to jurisdiction, the establishment clause did. The

plaintiffs there alleged causes of action for defamation and breach of a settlement agreement that was executed in an earlier TRINA N. FEHLMAN, CSR, RPR, CRR 40

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lawsuit they filed against their university employer." 124 So.3d, at 1213.

That's

"It's interesting that the free exercise

claim was that the ministerial exception barred jurisdiction because the teachers qualified as, quote, 'ministers,' end quote, within the church. This cuts against my earlier recommendation

that this exception only applies to statutory employment claims. But given the reply's assertions that the defendants here aren't arguing the ministerial exception, this wrinkle is immaterial. What's helpful from Winbery is its discussion of the entanglement doctrine, which, quote, 'provides that a court must decline jurisdiction over a lawsuit when the dispute is so intertwined with matters of religion that a proper resolution cannot be made without interpreting or choosing between competing religious principles or doctrines,'" ibid., at 1218. "The Court then

rejected the plaintiffs' claims that the case could be resolved according to 'neutral principles of law without excessive entanglements,' end quote. This was because, quote, 'to

determine whether the accusations that professors were teaching errant views, the Court would have to 'delve deeply into the Baptist theology,' and the other causes of action would require a similar analysis of church doctrine. "California law is in accord, and California courts emphasize that, quote, 'Civil courts cannot interfere in disputes relating to religious doctrine, practice, faith, ecclesiastical rule, discipline, custom, law, or polity.'" versus Kroeger, 167 Cal.App.4th 800, at 815. And that's New "This deference to

churches is at its height when the church is considered, quote, 'hierarchical,' end quote, or, quote, 'one in which individual TRINA N. FEHLMAN, CSR, RPR, CRR 41

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churches are organized as a body with other churches having similar faith and doctrines, and a common ruling convocation or ecclesiastical head,' end quote, 'vested with ultimate ecclesiastical authority over individual congregations and members of the entire organized church,' end quote. Here,

plaintiffs don't really dispute that the SDA is a hierarchical church (see the responses to LSU's separate statement, Fact Numbers 3 and 4.) They do complain that LSU isn't like other But, as above,

educational institutions the SDA Church runs.

they ignore the bylaws requiring LSU's adherence to SDA tenets. Therefore, it looks to me like the SDA, as a hierarchical church, is entitled to the utmost deference when it comes to selecting who represents the church publicly, whether at SDA schools or otherwise. "Kroeger, supra, is particularly instructive as described below. There, after a group of dissidents purported to

resign their memberships and join a different church, loyalist members of an Episcopalian Church filed a complaint under the Corporations Code Section 9418 seeking a declaration that they were, quote, 'the true and lawful directors,' end quote, of the parish in which the dispute arose. The Court held that it could

apply neutral principles of corporations law to decide whether the dissidents had properly resigned from the church. However,

the Court then held that it must, quote, 'defer to the acts of the representatives of the Episcopal Church in determining who were the true members of the church, and, under canon law, who were the lawful directors of the parish corporation." ibid., at 827. "This is because: TRINA N. FEHLMAN, CSR, RPR, CRR 42 And that's

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"Quote, 'Ecclesiastical decisions are not reviewable by the secular courts ... Where the subject matter of a dispute is purely ecclesiastical in its character, a matter which concerns church discipline or the conformity of its members to the standard of morals required of them, the decision of the church tribunal will not be interfered with by the secular courts either by reviewing their acts or by directing them to proceed in a certain manner, or, in fact, to proceed at all.'" 824. "Similarly, plaintiffs here are asking the Court to decide causes of action against LSU that necessarily require delving into church doctrine. On the causes of action based in That's ibid.,

contract, LSU" -- I'm sorry -- "plaintiffs argue LSU breached the agreement by constructively discharging them before the end of an express or implied term of employment. LSU responds that it had

grounds to terminate, if that's in fact what it did, because the faculty handbook states that any faculty member could be terminated for things such as 'neglect of responsibility' and 'flagrant and overt disharmony with or subversion of the philosophy, objectives, and lifestyle expectations of the university, as determined by the board of trustees and delineated in its current mission statement.'" That's Exhibit 15 to motion, "Plaintiffs don't

paragraph 6.4(b), page 299 of electronic copy.

dispute that they agreed to such terms of employment and instead contend they didn't violate any of these grounds." That's "The

response to LSU's separate statement, Fact Number 68.

problem with this approach is that, under the authorities cited therein -- cited herein, the Court lacks jurisdiction to say TRINA N. FEHLMAN, CSR, RPR, CRR 43

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whether any violations of SDA tenets occurred on the recording, or whether any such violations were flagrant and overt. Because

I see no way for the Court to adjudicate the causes of action for breach of contract (and, therefore, the one for breach of the implied covenant of good faith and fair dealing, which uses the same arguments by plaintiffs) without having to decide questions of church doctrine, I see no way for the Court to have jurisdiction over these claims." We're going to take about a ten-minute recess for the court reporter. And then we'll resume again in ten minutes. (Recess.) THE COURT: I'll recall RIC1112557, Kaatz, Beach, and All the counsel are present. As I've told

Bradley versus Graham, et al. I'll continue.

And I'm almost done.

jurors when I read jury instructions, it's difficult to pay attention even if you are potentially interested in and, unless you had a photographic memory, remember everything that was said. So I do apologize to some degree. Reading to people is probably But this is -- I'm,

the most ineffective way of communicating.

in a sense, making a record that I want to be clear, and I couldn't say it any better. done. And I'll continue exactly where I left off: immaterial that plaintiffs weren't teaching religion. "It is For So just bear with me. I'm almost

example, in Silo versus CHW Medical Foundation, 2002, 27 Cal.4th 1097, 1103, the Court reversed rulings allowing the claims of a janitor at a Catholic-owned hospital for termination in violation of public policy, even though his religious employer was exempt TRINA N. FEHLMAN, CSR, RPR, CRR 44

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from FEHA, to proceed.

The termination occurred because the

janitor was -- had a practice of proselytizing at work even though the hospital wanted to be open to people of all faiths." Ibid., at 1101. "The Court wrote the following in response to

the argument that the plaintiff was just a janitor: "'Silo's argument that he was merely a low-level employee who did not help to shape CHWMF's religious message does not assist him. CHWMF's problem was not that Silo failed to

properly perform a religious function that had been assigned to him, but rather he was engaged in religious communications --

proselytizing and other forms of religious speech -- that the employer neither authorized nor considered appropriate.'" at 1108. "Similarly, it seems here that the extent to which plaintiffs actually taught religion or otherwise acted as 'ministers' is completely irrelevant, because even if they didn't, the church is entitled to make its own decisions about how to respond when employees of a church-run school are deemed to have violated SDA doctrine. "For all these reasons, I think the Court lacks jurisdiction over the breach of contract and implied covenant claims. The same analysis leads me to the same conclusion on the "The Ibid.,

intentional infliction of emotional distress" -- I'm sorry.

same analysis leads me to the same conclusion on the intentional infliction of emotional distress claim, which is the only other cause of action alleged against LSU. In order to find that LSU

or any defendant has acted in an extreme or outrageous manner, the Court would have to find that church doctrine wasn't actually TRINA N. FEHLMAN, CSR, RPR, CRR 45

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violated, or that it -- or that it wasn't violated enough to justify the defendants' collective reactions. "All in all, then, I recommend granting all four motions. This is an interesting case with an odd fact pattern,"

and she has little doubt that it will end up on appeal. Now, as to the evidentiary rulings, "Plaintiffs made no evidentiary objections except, occasionally, in their response to defendants' separate statements. I recommend ignoring these

because they don't comply with California Rules of Court, Rules 3.1352 and 3.1354, which require a separate filing following a particular format. Defendants did lodge objections, but it's all The objections are, therefore, moot,

to evidence I didn't use.

and I recommend overruling them," which I do. As to joinder, "Blackmer, Jackson, and Graham all purported to join each others' motions. Because I recommend

granting their motions on the merits, their joinders are needless and irrelevant. They also fail procedurally" as -- "they also

fail as procedurally improper because they didn't file separate statements or explain why the motions by the other parties apply to them with equal force. This is reason to deny their attempt

to benefit from the work of a codefendant." Now, it is true that in some of the motions -- and I thank you for that -- rather than repeating them, they just reference what was said before in terms of argument. That's not

the same thing as incorporation, and I did not think it as such. Now, let me step back and speak from my larger impressions of this case. Adventist. First of all, I'm not a Seventh-day

I think some of the specific beliefs, as part of TRINA N. FEHLMAN, CSR, RPR, CRR 46

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church doctrine, are not things that I believe in.

I would think

that, in my personal view, evolution is probably taught in biology and creationism is probably taught in a religious course. I think, however, that the Seventh-day Adventist Church does a great deal of good. They're obviously a positive force in But there are

terms of their teaching and the values they teach.

lots of churches similar to the Latter-day -- the -- I keep saying Latter-day Saints because, again, I have the same feeling about the Latter-day Saints. I think some of their beliefs are But again, I think

kind of strange and I don't buy into them.

they do good work and are a positive force, and the same for most religions. But again, the thing that's clear is people are entitled to have their religions, practice their religions, allow them to set up high schools, colleges, universities essentially within the guidelines of what's expected to be taught by the university. And again, what I gather from these entanglement

cases is that if you are dealing with a religious institution and issues that significantly deal with both religious doctrine and morality, a religious morality, unless the Court absolutely has to, the Court should stay out of it. Now, obviously, even in some of the cases that talk about entanglement, which includes the Serbian Eastern Orthodox Diocese, et cetera, versus Milivojevich, spelled M-i-l-i-v-o-j-e-v-i-c-h, which was cited by someone at 426, 712 -- 707, rather, clearly, the Court found entanglement issues. But in order to decide who has the property, they had to make a decision about that, and they made the decision. TRINA N. FEHLMAN, CSR, RPR, CRR 47 So again, I

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think what -- the rule I gather is that if you can't avoid it, like there's a piece of property and they're going to essentially go to war and squat on the property, the Court has no choice, it will enter into it, but will do everything it can to avoid participating in discussions about doctrine or making unnecessary decisions which seems, to me, clear, in this case. I think that New versus Kroeger, 167 Cal.App.4th 800, probably is the case that's most significant and closest on this case. That case does say specifically that -- at Headnote 9 at

page 820 -- that the fact that you have religious corporations -and I suspect that you have separate corporations that are interrelated for liability issues, it's like having a whollyowned corporation. People are allowed to set up corporations to

protect liability and protect their assets, and so segmentize liability. So if something happens in one branch of the church, As it is with corporate

all the rest of it doesn't have to fall. law, religions get the benefit of that.

But I don't think that fact and the fact that LSU is set up separately changes the fact that you all operate under the auspices of the Seventh-day Adventist Church, that the values that are subscribed to and set forth are expected to be shared by, enforced, and guide the activities of not just the ministers, but the people who go to the parishes, the people who teach in the schools, and so forth. And it just seems to me that the discussions that are on this tape and what happened afterwards are so intertwined with issues relating to church doctrine, but even less than that, more involved with church morality that the church has to decide on TRINA N. FEHLMAN, CSR, RPR, CRR 48

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its own how it's going to handle these things.

And I think this

Court is becoming unnecessarily entangled by being forced to participate in this process. So that's my general thought in that regard. couple more points I want to make. I have a

The overview of the trustees'

responsibility -- this is the overriding responsibility of a trustee, including Mr. Graham -- includes defend the university from influences that interfere with achieving its mission, safeguard the principles of moral integrity and academic freedom for the community of scholars. Moral integrity. That, I think, is so critical that

you would be hard-pressed to suggest that Mr. Graham did not have a right to act in a way he thought fit in contacting these three gentlemen. resignation. And again, as pointed out, he could not accept a He could not fire these people. But he could

certainly make the initial contact, under the color of what he thought was the right thing to do, and present it to the board, on which they then acted. Now, I agree that as to the three defendants, it's a little bit different because one defendant was the dean of the school, there was another person that held a substantial administrative position, and there was Mr. Bradley who, I think, had a part-time contract. I would suspect -- the gentlemen --

the three gentlemen had been with the university for 100 years combined -- that Mr. Bradley was probably retired and working on a part-time contract. According to the bylaws, that appears that that should have been done in conjunction with the president of the TRINA N. FEHLMAN, CSR, RPR, CRR 49

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university.

But it seems to me that's under that Section B that

I talked about, where the board can directly deal with the president of the university and the people of the administration, which, I think, would take care of Mr. Kaatz and Mr. Beach directly. But it seems to me that the overlying privileges to

what the university's all about is the kind of thing that Mr. Graham was justified in doing. Now, let me go through what we're really talking about here, because everyone is just soft-shoeing it. That tape

recording, a transcript of which is included as Exhibit 4 in the separately bound volume of evidence which is attached and filed on November 27th, is remarkable. You know, it's kind of

remarkably tolerant of the university that all they wanted of Mr. Kaatz and Mr. Beach is to remove them from the leadership positions, and go ahead and resume their teaching positions. seems to me that had they wanted to, and they had been a truly malicious -- not malicious, but had been a truly vindictive organization, they would have cut their ties with them altogether. I had a brief discussion with the research attorney. And the question is, who really breached the contract? Did the It

university breach the contract by firing Mr. Kaatz, Mr. Beach, and Mr. Bradley? Or did Mr. Kaatz, Beach, and Bradley breach the And

contract by violating the morals clause with this recording?

again, for some reason, the plaintiffs blame the university for disseminating the recording. of that claim at all. Mr. Darnell, who, essentially, I think, is an ally with TRINA N. FEHLMAN, CSR, RPR, CRR 50 And I don't understand the nature

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these three gentlemen -- at least it sounds that way on the tape -- surreptitiously and proper -- probably improperly recorded the conversations with Mr. Jackson and Mr. Blackmer. Then he leaves his phone on and records the conversation between the three gentlemen and himself at Mr. Beach's house, then sends the recording for, I would assume, reasons that he thought would benefit he and the people pursuing that particular position, to the Spectrum, which I gather is a nonchurch-controlled organization, but run by Seventh-day Adventist, to point out what exactly they feel they're forced to do. Because I get the clear

impression here that these gentlemen thought that they were being unfairly evaluated and that the deviations were being found against them which, I guess, would have some impact upon their accreditation and so forth. So I suspect they were using the Spectrum as a forum to either put pressure or to stop this from happening. only logical conclusion I can come to. significant or not. That's the

It's not really

But when you send this recording to Spectrum

on a website that's now open to the public, and, now, that way, Mr. Blackmer and Mr. Jackson get ahold of it and then pass it on to Mr. Graham, there's no right to privacy, and there's nothing that Mr. Blackmer or Mr. Jackson have done wrong. Also, by -- seeking the resignation of these gentlemen and perhaps limiting the -- the dissemination of this tape recording, arguably, is also a fair request. Now, I don't know

what caused Mr. Beach, Mr. Kaatz, and Mr. Bradley to decide they didn't all want to go that route and eventually file a lawsuit. But now this recording is before God and country. TRINA N. FEHLMAN, CSR, RPR, CRR 51

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 it.

And if half of this is true -- and let me go through I'm going to spend a little bit of time going through what's If half of it's true, it's just really

on this tape recording. bad.

Now -- and I say that knowing that all of us, to some degree or the other, are hypocrites. There's probably relatively And I

few true saints that are not hypocrites in some sense.

suspect, myself included, I have said things with friends that I would -- have regretted saying, I have no justification for saying, and I could be criticized for doing so. that. I understand

But once it's made public, and once I have done it, I can

do nothing other than apologize and accept responsibility for what I did. That's what happened. That's what I did.

And when you deal with it, with people in a religious context, it's generally looked at as even more problematic and worse. It's like a police officer violating the law. We have a

position of trust.

And the position they take is such that we

really do have a higher expectation because, remember, they're speaking from the voice of God, and they're telling people they will go to heaven or hell based upon what they say. So you

expect the messenger to be -- also have the integrity when they speak. That's why we're so upset with Jimmy Swaggart and his There was a major megachurch, where the minister was We have the problem

prostitute.

drinking in hot tubs, naked, with women. with priests in the Catholic Church.

And on and on it goes.

That's why we're so offended by Popes, in the past, that would have children. different. You preach one thing and you do something

The hypocrisy becomes so obvious that you would think TRINA N. FEHLMAN, CSR, RPR, CRR 52

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people would be offended and the image of the church, which is important to churches, would be adversely affected. Now, the first part of the conversation, at page 30, again talks about the theological difference and the problems with the biology curriculum and the religious curriculum, and, apparently, there's a reference to Webster. ripe and long-winded. I guess, Webster is

And I appreciate that, kind of like me.

But at any rate, I guess, he's a religious teacher and they're saying that maybe creationism should be taught there. But

there's a whole discussion here that talks about church theology that is significant and underscores the entanglement issues. But then you go to page 31, or page 2 of the transcript. And there's a word by someone. Now, I get the

feeling that the individual plaintiffs feel that if they didn't say it, they're not responsible for it. of adoptive admissions. But that's not the law

Not -- that's not the part of being part

of a conversation, where you're laughing about things and not voicing disagreements about -- but this is what -- the kind of thing that's said: "Yeah. skirt. The whole front end was just blow smoke up your

And then, once they had broken and got back together,

they actually started answering questions, but still nothing that gives me -- oh, and the other thing Jackson just basically said, quote, 'I'm a eunuch,' end quote. "Yep. "And he said it over and over again. And Blackmer

wouldn't admit to being a eunuch, because he's a bully. "Yep. TRINA N. FEHLMAN, CSR, RPR, CRR 53

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

"But he's just a eunuch bully. "Blackmer never came out -- never -- Ginger's question -- no Kendra's -- " Then it goes on and says, "Well, I think when he talks through the other side his mouth, he gets credit that way. "Yeah, I saw a line that said, you know, there's two things that I dislike about you -- your face. "(Laughter.) "It drove Randal crazy that I was sitting up top. "Good." Then we go to page 33: "But Pawluk -- I asked Pawluk, And he said,

quote, 'Were you there when that was going on?' 'Yes. Everything she said was right on.

That is exactly

right.'" "Voice four: sounded very weak. "Ginger? "Ginger. "There is always something is going on with her. "I mean, is she physically sound or -"She's always got -"She's never been -"Oh, she hasn't? "No. "She is very imaginative. "She's not. "Okay. "And now you don't know how much of it is her lupus TRINA N. FEHLMAN, CSR, RPR, CRR 54 I don't think she -- she has lupus. Oh, I don't know. Hum, I didn't see her, but her voice

Is there something going on with her?

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flaring up and how much of it is she is using as an excuse to, uh -- the guys in religion say, you know, she never uses it as an excuse with them, so it's not a Florence Mon" -- I don't know the spelling -- "Robertson syndrome. "(Laughter.) "She's got a lot better at hiding whatever it is. "I'll drink to that. "Oh, okay. "I got away with it." And then we go on to say -- I mean -- I mean, it's not -- it doesn't -- not going to take much of a trial lawyer to present this to the jury and talk about the fact that people are commenting upon a disability and a disease that a person has. And that doesn't look good. may be an outlier here. Then we go on. "Voice four: Well, you know, you have Yeah, I learned Blackmer At least, it doesn't to me. But I

got -- you have to study your enemy.

will speak out of every side of his mouth that he can and that Jackson's a sheep. He's a eunuch. There's nothing he's going to He was given plenty of

do except spread peace and love. opportunity.

He says, quote, 'Well, we have no control over the But he was given plenty of opportunity to

review,' end quote.

say, 'Well, are you going to speak out against what they did?' And the answer is, 'No.' Because -- just because one Adventist

institution criticizes another doesn't mean we should criticize the one that criticized the criticizer. "Yeah. Bullshit.

"And then -- and if only when Kendra talked -- not Ken. TRINA N. FEHLMAN, CSR, RPR, CRR 55

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

Uh, no.

Uh, the other one. "Ginger?" Number four: "Ginger talked. And he had to answer

her.

It was the only time that I almost stood up and said And I wanted to say, 'This sounds like Catholics with

something.

their priests.' "(Laughter.) "Because, you know, he's talking about how we don't confront and all of this, yeah. are known abusers. But you move people around who

They may not be abusing the way priests do,

but they are ruining just as many lives, just as thoroughly. "I wish I would have recorded the first half. "I have the whole thing recorded, but I don't know how well." Then we go on to say, at the next page, 35, "Well, he said he's -- he said, he said he need a spanking. "Voice: He should be hauled in and spanked. Spanked

is what he meant, but -"Oh. "Yeah, he said spanked. the Michigan Conference. "But he said, 'If there's a problem, you don't have to work out with the Michigan Conference. "No. He said that when he saw what Asherick did, as He said the same thing about

president of the Canadian Union, he said that guy should be hauled in and spanked. When I (sic) saw what the Michigan

Conference did, while he was president of the Canadian Union, he said, 'They should be hauled in and spanked.'" TRINA N. FEHLMAN, CSR, RPR, CRR 56

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 a bad man.

Then you go to the next page, page 36:

"And he

adamantly says, Blackmer did, that Ted Wilson" -- I think who is the chairman of the general counsel -- "had nothing to do with -no influence over the AAA's decision." And, for the record, I

think the AAA is a accrediting body, and there was a dispute going on relating to problems with the accreditation of LSU. "Answer (sic): Bullshit.

"No, he said -- over the inclusion of the word 'deviation.' it. And he didn't say Ted Wilson had nothing to do with

He said Ted Wilson was not responsible for the final edit So let's get the language right. It doesn't

where it appeared.

mean that Wilson didn't call the guy that had the responsibility for the final edit." And then they go on to say, that man is dangerous, he's

"Voice: "Yeah."

Blackmer?

Again, disputes over doctrine, over deviation, over issues relating to accreditation just runs through this entire conversation. All right. Then we go to the next page. Again, "I Blackmer

wish Pawluk had said that at the -- to those guys.

speaks very well out of both sides of his mouth, though, I do have to admit. This guy was -- the man I saw in the first

90 minutes was a completely different person than the one I saw in the closed-session board meeting. "Wow. "If I hadn't seen the one in the closed-session board TRINA N. FEHLMAN, CSR, RPR, CRR 57

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

meeting, I would have thought, 'Oh, this guy's reasonable, he gets it. He understands the issues.' "Yeah, because I was sitting there thinking, you know, this guy sure sounds more reasonable than the stories out there. "Unbelievable. It was only at the very end that he let

out that he thought that, um -- that, in his view, the faith had to be in every class, and that specific. "He said that over and over again, you know, to others, you know. "Huh? "He's one of those guys who says, 'Every class should be" -- and then there's 'inaudible.' "Well, their -- well, were you guys there when he said, quote, 'We're not a university to teach excellent academics'? "We already have a Harvard. "Yeah. We're not a university to teach Jesus. We're a There's

Baptists and those things that can teach Jesus.

university to teach the uniquely Seventh-day Adventist message. "Voice three: "Yeah. He said that in the back?

He said, 'We have no reason to exist if we're He said,

not teaching a uniquely Seventh-day Adventist message.'

'We, as a North American Division, put $28 million a year into our educational system. And if we wanted our kids to have just a

Christian education or just a good education, we'd send them somewhere else. "Voice three: "(Whistling.) "But they don't want us to be a bible college? TRINA N. FEHLMAN, CSR, RPR, CRR 58 I'll drink to that.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 around. hike. mouth.

"Well, that's how you speak out of both sides of your You say things that -- but his true colors are there.

Are you going to the Calgary or Alberta or whatever this thing is? "Banff." Now, then they go on to talk about -- apparently, Banff is a meeting where, I guess, a number of Seventh-day Adventists are getting together. conversation. This is voice four: "In Banff, get your ... hiking And this is what they say in this

boots, stay the weekend" -- I'll be done in just a minute -- "on either side. "Oh, yeah. hiking anymore. "Voice four: Oh, yeah. But, I mean, you don't have to I'm an old fart, man. I don't do that much

"Victim (sic) one:

I'd like to go up there and look

"Voice two: "Voice one: floating around.

Oh, sure. But you've got a whole bunch of Adventists

How are you going to go in and have a good

steak and a good bottle of wine? "Voice four: No, that's why you have to stay the

weekend before and after. "(Laughter.) "Oh, week after. "(All laughing.) "Oh, yeah. Bummer. 59 Oh, I missed it.

TRINA N. FEHLMAN, CSR, RPR, CRR

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Number 9.

"(All laughing.) "Oh, brother." Now, that's pretty bad. note, and we'll come back at 1:30. (Noon Recess.) THE COURT: All right. I'll recall RIC1112557, Kaatz, This is the hearing on And we'll leave on that low

Beach, and Bradley versus Graham, et al.

the motion for summary judgment, and I'm going to continue my comments. And again, I'm at page 38 of the Exhibit Number 4 -- or And it says -- I guess I'm on page 40 now. I'm sorry.

And this is towards the top. teaches what in what class. believe after they leave.

"He says, 'It's not about who It's not even about what they

It's a more fundamental issue than

that, and it's an issue that's in the church and in the definition of our identity as a church. Until you guys solve

that, you're never going to solve it on the university campus.' And it went from there. So his question was actually a

ten-minute lecture followed by, quote, 'What do you think of what I said?' "(Laughter.) "But the reality is -"Voice number three: He's got that funky hairdo. " -- you know the You can You

" -- you know" -- next voice.

evidence is on -- is in on most of this evolution stuff. part it the way you want, but the (sic) evidence is in.

better figure out how you're going to take Genesis I and preserve the creating savior." TRINA N. FEHLMAN, CSR, RPR, CRR 60

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 point.

And so there's more discussions that I think directly impact the theological underpinnings of the church. Then you go to the next page, page 41. And it says:

"(Laughter) (Opening the bottles and pouring drinks.) "I like that one a lot. "Voice: I would not -- he doesn't mind the liquor.

He's just anti-a forte and anti-sinfulism -- sinfulism and all of that. I haven't paid much attention to the review and what they And I did not realize how much anger and hurt and That -- "

had done.

animosity that review article created on campus. And then next voice: Educate Truth line. "Yep. "Yep."

"Because they basically told the

Then it goes on to say, "You even had the mic at one Were you going to say something? "Voice: Oh, my goodness. I

"Well, John Webster finished and gave it to me. don't know why. "Oh, I see. "(Laughter.)

"I know if I -- I sort of didn't know what happened before because I was gone for a while. But my request would have

been, you know, Larry, what you said, you don't agree with the word 'deviation'? Are you willing to send an e-mail at least to

all the members -- all the employees of the North American Division saying that it was unfortunate wording, what you put in there by mistake, you know? TRINA N. FEHLMAN, CSR, RPR, CRR 61

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 today?

"Right.

Right."

So again, more discussions about theological -potentially theological issues. Then at page 42, "Voice: And see, if I could

communicate one thing to those idiots at the church hierarchy, it would be that I've watched for decades the traditional position. Tell kids that science has nothing to it and they go find out what the science is and they're blown away. We present the

evidence (sic) in a context that is far more faith-affirming and they're not going to get blown away. Okay? This works better

for" -- I think it was clarified by Mr. Bradley, but the word was for "conning" the kids into just staying Adventist. But, again -- then on the next page, "I wish -- I wish Wisbey had the guts. Wisbey didn't want Blackmer there. His

protest to do that was that his communication with Jackson was all fine, but not to mention Blackmer or anything, but simply to copy him on all communications with Jackson, he said, if that accomplished anything (sic). "Well, Wisbey -- Wisbey didn't want Blackmer here

"Yeah.

And so I said, 'Well, why didn't you say to But he

Jackson you don't want Blackmer on this campus again?'

couldn't pull his bull -- his balls out of his belt pocket to do either. So Wisbey was, uh, if he didn't get more

(unintelligible) than he throws -- " Then you go on to the page number 44. asked those guys to do it. "Well, I (sic)

But the way Pawluk" -- and that's

spelled P-a-w-l-u-k in this transcript -- "phrased it to me -- he TRINA N. FEHLMAN, CSR, RPR, CRR 62

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

was going to make a statement that said, 'We're not going to mess with this anymore. We're not going to reply to e-mails. We're

going to get -- we're going to get about to go about (sic) business of becoming a better university, and we're not -- we're not -- we're not engaging in this until the board comes in,' which is fine, except the reality is if somebody is shitting on your head you at least have to wipe it off. "(Laughing loudly.) "So -"Let me ask you a question. Both Jackson and Blackmer Yeah, wipe it off.

made the question -- made the statement tonight that that open letter is the best thing La Sierra could have done. That

would -- would have happened if we hadn't done what -- done that would have been much worse. put on probation. Now, to me, much worse means being

Um, Blackmer said that in so many words."

So again, I think this is a discussion about the credibility that I mentioned earlier. Then you go on, to the next page. "Yeah, Bobby Brown

made a good statement at the end, too, about you know -- they need to make a statement about that word was not appropriate in there. And if that's what they believe -- it's basically saying

if they have any balls, if they (sic) had any ethics, they would make a statement. All right? I'm hoping Jackson will say

something and let Blackmer fight that out with him, but I almost think we could probably co-opt Jackson, but maybe not. "Answer (sic): He's got no power."

Then you go on to this discussion, which gives you some idea that contrary, I think, to the position the plaintiffs are TRINA N. FEHLMAN, CSR, RPR, CRR 63

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

taking, that this is a totally separate university and that it should be looked at independently, and that the North American Division people nor the Pacific Union people have any business getting themselves involved. This is what, I think, the

plaintiffs really see the situation as being, which is probably closer to the truth. "Right. And they -- part and parcel with that is they

want a North American educational system that is not conferenceand union-owned and run, but centrally owned and centrally managed. "Right. "That worries me. "So it's a double-edged sword. "Yeah. "I'd be happy to give them the accrediting. But this

is -- is the only issue that -- in any length that Jerry McIntosh and I have disagreed on at length over ten years. He wants the

system and he wants the specialties built up so that we don't have to duplicate efforts and all of that. "That's bullshit. "No, but I understand his point. I'm on the board of

La Sierra, and I'm not on a -- if somebody put me on a North American Division national education think tank, I don't know what I would think. But -We

"No, we need a Brigham Young, but we don't have it. can't get there. "Yeah. "Well, if this is the -TRINA N. FEHLMAN, CSR, RPR, CRR

64

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 culprits. that page:

"Voice:

Ellen White University?

"This system thing that Jerry talks about and others have talked about in the past, it doesn't make any sense. mean, you know, yeah, Walla Walla can have an engineering program. And if it's right for the community they serve, they But that shouldn't preclude us from having one We need a system like UC, or Every one of these suckers I

should have it.

if it's right for our community. the -- Cal State has a system. survives on its own.

And it's only when you get two of them in a

room, friends or peers, they're cutting each other's throats. Right? "Right." And then, it goes on to the next page, continuing on "Right. "Right. "But as soon as the kids say, 'Well, maybe I -- I'll go to Michigan State or something,' then they're selling UC. "They're selling UC, right. "All right? So --

"Well, isn't that kind of what we do with the PUC? "Well, but they're up front about it and we're not. I

mean, we're sitting in our own board meeting saying, 'What would that do to the PUC?' PUC, you know? "Is that happening anymore? "Oh, yeah. I mean, Wisbey fought these -- those three I don't give a shit what it does to the

"Really? TRINA N. FEHLMAN, CSR, RPR, CRR 65

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 that good.

"Really (sic).

I mean, about PUC's survival?"

And on it goes about, again, governorship and all the other issues involved. All right. the Spectrum: Then, page 49, there's a discussion about I

"I'm curious to see what Spectrum is doing.

didn't realize they still published the magazine.

I just look at

their blog -- you know, at their website and their blog, but Blackmer talked over and over again about this comment -- about his comments to Spectrum. "So what? somebody else? "I read his stuff, in a Inside Higher Ed. It wasn't Because he says something different to

"Oh, he was real proud of that too. "I know he was. "Make a bad" -- then unintelligible -- "so important. "Well, he's -- this guy's got an inflated view of his own self-importance. "Well, no, I agree that you have to be pretty special to talk Inside Higher Ed. "(All laughing.) "Especially to talk about something and bullshit. "Oh, the other thing Blackmer said -- he claimed -what did he claim about -- there was something he claimed that he took notes from the biology discussion, and then" -- something, goes on. There's a discussion. Then you go on page 51, this discussion again. This is

representative of some of the discussions that happen here. TRINA N. FEHLMAN, CSR, RPR, CRR 66

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

"And, um, Trueblood said that to him.

He says, 'I did, um, four

years of college, two years in masters, and six years in a Ph.D. program.' He says, 'I can explain my biology stuff because I He says, 'As far as I -- as far as Genesis I,'

know that stuff.'

he says, 'I can tell my students what Belief Number 6 is, but if you're looking for me to do an exegesis,' spelled e-x-e-g-e-s-i-s, 'I'm not going to do that.' "Precisely. "And that's a reasonable position. "And that's Greer's position. As screwed up as he

sometimes get (sic) when he's blowing off smoke, that's his position. He does that. I mean, he does that in spades."

And then, page 52, "So Dan Jackson is basically another Richard (sic) Graham. "Yeah, yeah, he's a eunuch. It was the eunuch -- it

was the tale of the eunuch and the bully. "Well, you know what they're -- what they say, being a Richard (sic) Graham beats the hell out of being Ella. "You know what? I would love to have experienced the

last two years under Tom Mostert rather than under Ricardo Graham on this issue. "Why? "Because he would have -- I don't know whether he would have taken the church's side or the university side, but if he had taken the church's side, he would have -- we would have been able to rise the board against him. And -- but I don't think he

would have -- I don't think he would -- I mean, if the later part of his career, where he ... wasn't getting promoted again, he TRINA N. FEHLMAN, CSR, RPR, CRR 67

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

would've stood up to them. "I'll tell you what would have happened. kicked those ladies' butts. "Yeah. "He would have reamed their asses. "Oh, yeah. "(Laughter.) "Yeah, and Shereen would have made it past the first interview -- and Shereen would have never made it past the first interview. issue. I mean, we would have never even known about that He wouldn't stand for that. He would have

You know, whenever Warren or Larry would have come to him And

and said, 'We're thinking about this,' and he would go 'No.' then I would've found out later that he had done that and been pissed at him for acting on behalf of the board. wouldn't have mattered. And -- " But it still

Then there's this discussion at page 54:

"But Carla is

good buds with Louie Bishop's sisters or aunts or something. "No, but Katie (sic) Proffitt -"She's not even married. "Well, she used to be. being married? I know her kid. She got knocked up without

"Yeah, she's been married. "If that's the case, I've never heard of it. But I

don't know if that would be a particular problem -- would be a particular problem, would it be? Because why, unless their

relationship with each other was mater- -- well, maybe that's what's being spread around. "(Laughter.) TRINA N. FEHLMAN, CSR, RPR, CRR 68

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

"Bumping fuzzies? "(Laughter.)

Is that what you're saying?

"You know, if you told me that about Kathy, I would not be surprised at all. "I don't know her. "And you're just as well off. "Well, I do have a choice (sic) that come the May board meeting, Carla's going to have a hell of a choice. "(Laughter.)" Then there's this discussion at page 55: Suzanne Mallory has done an abominable job of it. "Isn't it already going on right now? "Yes, I'm going to step in as team leader. "Oh, you're going to take it over? "And I told Faith -- she took me to lunch today, and I said, 'Anytime you take me to lunch [unintelligible] the axe is coming. "Who? "Favorito. "Oh. "I know there's a hook in this -"Fay Burrito. "Fav. "What does the word -- what does fay mean, f-a-y? "No, no, fav. "I -- no, I know. "Fay means gay. "That's what I thought. So I called her the fay 69 What does fay mean? I like that. "Because

TRINA N. FEHLMAN, CSR, RPR, CRR

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

burrito. "(Laughter.) "Right. It means the --

"No, but fay fay would be a prerogative (sic) for a male and not a female. "What about a piece of food? "(Laughter.) "I thought you were saying Faye Swayze. "(Laughter.) "I'm sorry, I just -- a fay burrito. "(Laughter.) "That's one hell of a gay burrito. "(Laughter.) "A fay burrito. "(Laughter.) "Well, I don't think that affects you now -"No, I told her, 'Listen, I will do this on two conditions,' which I named. to find someone else.' votes. But I said, 'Come May, you may have A fay burrito.

'No,' she said, 'We counted all the

We think you have it,' which echoes what I heard you

saying indirectly. "All right. "Exactly. "No, that's not in a fairy as in a fairy -"Yet, like, with little wings. " -- in a small being form. powers. "(Laughter.) TRINA N. FEHLMAN, CSR, RPR, CRR 70 Playful, having magical Here's what fay means. It means a fairy.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 adult.

"Jeb.

Jeb will tell you; right?

"A fairy, uh." Then there's a discussion about somebody named Nate Brandstater's father. "Yeah. "I knew him in Lebanon, but I've never known him as an And it goes like this: "Who? Bernard?

"Even his sister says he's screwy. "Really. "Oh, yeah. Is he screwy?

(Laughs.)

Rhonna Hodges is just -- is his sister.

And she just says he is nuts. "Hmm. "Yeah, Nate's dad would be okay." And then you go on to the next page, that's page 60. It goes, "Thank you for the brew. "Yeah. "Thank you for the company. "All right. "Thanks for coming over." And the meeting breaks up. Now, to an outsider, it looks like these gentlemen who participated in this conversation made derogatory comments about a person with disabilities, made fun of the fundamental belief of the Latter-day Saints -- gosh -- the Seventh-day Adventists relating to eating meat and drinking wine, made arguably derogatory comments about sexual orientation as well as carried on an extended discussion and told, in no uncertain terms, what they thought of various people, all of which seems to me, in the TRINA N. FEHLMAN, CSR, RPR, CRR 71

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

great scheme of things, could cause considerable concern to Mr. Graham and the board of trustees, who have the responsibility to defend the university from influences which interfere with achieving its mission and safeguard the principles of moral integrity and academic freedom to the community of scholars. So it seems to me there is nothing inappropriate about him contacting these three gentlemen and seeing if they would resign. I'd note these gentlemen are all adults. I think they

all have advanced degrees.

They were all there when these

conversations were occurring, so they had some idea what was on the tape. And I don't see why he has to give them time to sign These are choices that you have But to say that's

the resignation letter or not.

to make, and they may not be pleasant choices. coercion, it's just not there.

It's noted in some of the answers that no one has any evidence that Mr. Graham bore any particular animus against them. There's no evidence that Mr. Graham was doing anything other -operating what he thought was appropriate by his own likes. I

would expect him to have consulted not only with Mr. Blackmer and Mr. Jackson, but probably with a lot of other people, trying to figure out the right thing to do. I would have expected him to

talk to some of the board members and, essentially, thought about this over a considerable period of time and decided this is what to do. Now, as to whether or not this conduct breaches the contract or inappropriate, I think, is missing the point. I

think the real point is did the conduct that these gentlemen displayed in this conversation, where they are displaying values TRINA N. FEHLMAN, CSR, RPR, CRR 72

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

on their face that are contrary to the values of the -fundamental values of the church, make them unfit for leadership positions? themselves? And do they breach the contract and the morals clause And it seems to me that it did.

And so, I guess, for all the reasons stated as well as my additional reasons, I would grant the motion for summary judgment as to all four defendants and the motions for summary adjudication on all issues, as requested. I would note that if this matter went to trial, the questioning, I would think, would be really extremely embarrassing. I mean, I could just visualize questions about fay

burrito, and how you came up with that, and why didn't you protest, and why did you laugh? Could be rather embarrassing. I

would think that the discussions about you don't want to be at a meeting where Seventh-day Adventists are because you can't eat red meat or drink wine and, therefore, you have to avoid them, I think that even if you don't say it, the fact you might have laughed when it's being said, I could just see the line of questioning that could be grossly embarrassing in that context. I would think the discussion about the person with lupus and so forth and so on would also be highly embarrassing. And so if I knew that people in leadership positions in my church were on tape, publicly accessible to the entire world, making comments like this, I would -- I would have great concern. really don't see what else the church could have done. So anyway, for all those reasons, I would grant the motion. Did you wish to be heard further, Mr. Daggett? TRINA N. FEHLMAN, CSR, RPR, CRR 73 And I

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 me.

MR. DAGGETT: THE COURT:

No, your Honor. Mr. Connally? No. We'll submit, your Honor. Now, Mr. McCune, you've listened to And I'm sure I've afflicted you So I will do you the I will

MR. CONNALLY: THE COURT:

Okay.

And you've been patient.

and you disagree with most of what I said.

courtesy of allowing you to state what you wish to state. not be offended. thick skin. You can call me a jerk.

I do have a pretty

I've been called many bad things and I'm not But I invite you to complete your record.

offended by it.

Because, obviously, I would expect you to take an appeal on this. MR. McCUNE: I appreciate that, your Honor. Yes, I

will not be calling the Court a jerk. THE COURT: was a jerk. MR. McCUNE: I believe you're wrong, your Honor, but I It's okay. If I were you, I would think I

don't believe you're a jerk. THE COURT: MR. McCUNE: Okay. There's a couple of things that I need

to -- to clean up, at least from my standpoint, that I believe that the Court got wrong on the facts. And one of those -- and I

think it's an important one -- was what I understood the Court to say, that it was their understanding that Larry Black- -Blackmer or Jackson obtained the transcript from the Spectrum. And that is -THE COURT: No, no, no. They -- I think I -- as I

understand it, they -- it was sent to the Spectrum by -- by Larry (sic) Darnell. And I don't know where -- the person who 74

TRINA N. FEHLMAN, CSR, RPR, CRR

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got it, but I got the impression it was sent to either Blackmer or Jackson by Proffitt, was it? MR. McCUNE: THE COURT: MR. McCUNE: Court was saying. THE COURT: But I just thought -- I don't know, Yes. That's how I understood it to be. Okay. Maybe I misunderstood what the

ultimately, where she got it from or how she got access or how it got to a matter of general circulation. got out there fast. MR. McCUNE: there fast. Well, that's my point. It didn't get out But again, it certainly

There is no evidence that anyone at any time This is a post-litigation

downloaded that from the Spectrum. manufactured reason. interesting is the -THE COURT:

There is no indication -- what I find very

Well, did they send it to Ms. Proffitt?

Is

that what they did, is they sent a copy of the surreptitious recording of Jackson and Blackmer, and Ms. Proffitt got it and listened to the whole tape and saw this other stuff and became concerned? MR. McCUNE: The Court has repeatedly said "they." My clients are not "they." My

clients did not do that. THE COURT: MR. McCUNE: THE COURT:

All right. Mr. Darnell did. Mr. Darnell, who, if I was an attorney

arguing these cases, would argue -- apparently shared a community of interest and the same values and were pursuing the same goals. And arguably, an act by one of them might be attributable to all TRINA N. FEHLMAN, CSR, RPR, CRR 75

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

of them. Let's say, to separate it out, it was Mr. Darnell sent the -- the recording, I guess, to Ms. Proffitt. did? MR. McCUNE: THE COURT: may continue. MR. McCUNE: What I mostly know is Ms. Proffitt, who is That's my understanding. Okay. Well, that's fine. Go ahead. You Is that what he

a board member, sent it to Larry Blackmer. THE COURT: MR. McCUNE: Right. I understood that to be true.

But what -- there is nothing in this

record that -- that that transcript, whether it was sent to Spectrum, whether it was posted on -- or linked to Spectrum, anybody ever saw it from Spectrum. THE COURT: Let me ask you a more fundamental question.

Let's assume somebody does wrong, and that's what they believe. And, in fact, they have a set of values and beliefs that are inconsistent with the values of the church. Now, let's assume So

they did their very best to conceal it, but it came to light.

the underlying issue is they do, in fact, have this problem with the church and they just have morality. be protected? Do you think it ought to

I mean, it comes up fairly often, where police And the question

stumble over things that think they are hidden.

is, is that a legitimate defense is -- that you were unsuccessful in keeping your true values hidden? MR. McCUNE: I, first of all, take exception to true

values being reflected in there, for much of what the Court read related to Lenny Darnell. And to impute that to a morality issue 76

TRINA N. FEHLMAN, CSR, RPR, CRR

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with my clients is not -- not fair. THE COURT: No, you would think that if they were You would be That's

there, you would do things other than laughing.

protesting or saying that's not correct, and so forth. not what I see going on. MR. McCUNE:

I understand the Court has -- has reached I think it is inconsistent with

a view of what -- what happened.

most people, in their private conversations, having an open dialogue about many, many subjects. There are some things in

there that, obviously, my clients aren't very excited about and wish they had not said. But this Court and the parties seem to

be really excited about a -- a First Amendment freedom of religion issue without any concern about a privacy issue, that people can have conversations in their own home, and the Court can spent quite a bit of time reading it into the record, when there was an expectation of privacy in that conversation. That's -- I think those are inconsistent, caring about one very important right and not caring about the other important right. THE COURT: So what you're really saying is that so

long as nobody knows about it and you're successful in keeping it hidden, it's okay to engage in arguable misconduct. MR. McCUNE: can't accept. Well, the arguable misconduct part, I

I think it is absolutely okay to have free-flowing

exchange of ideas. THE COURT: So how would you characterize the Are you in favor of that

discussion about the fay burrito? discussion?

TRINA N. FEHLMAN, CSR, RPR, CRR 77

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 question.

MR. McCUNE:

Well, in favor of it is a different

The answer is -- is -THE COURT: Do you think that reflects poorly on the

church, if that's brought out that the people who are leaders of the church were having that discussion? MR. McCUNE: If that was the motivation for

Mr. Jackson, I think, when he wrote his e-mail, which is -- we've attached as Exhibit 19, in which he says to Larry, after reading the transcript, I am so disturbed, and perhaps angry, that I was so foolish and soppy as to believe that hardcore dissidents like the administrators at La Sierra could be open to diplomacy and a pastoral approach to the issue. Fool me twice, shame on me. Damn. Fool me once, shame on you.

That's all I will say right now. There's no

That is what was motivating Mr. Jackson.

mention of -- there of, oh, my, we've got employees that are -are -THE COURT: motivating him. Let's assume that's part of what is I know

You have a discussion with these people.

what the tape says.

You think you would have an understanding

going forward constructively, based upon the representations. But yet, behind closed doors, you're being referred to as a eunuch or a bully, and you see what their true colors are. And

now you realized, essentially, that you've been deceived and so forth. I mean, that's my play before a jury. MR. McCUNE: fair argument. mud-slinging. THE COURT: You really don't think that Mr. Graham, who 78 Absolutely. And I think that's the more

I think all the rest of this is -- is just

TRINA N. FEHLMAN, CSR, RPR, CRR

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has no animus, wouldn't be concerned about what he hears?

I

mean, I -- if I was a Seventh-day Adventist, just a layperson having nothing to say, just going to church and having to do my job, I would be disturbed if I heard somebody talking about, hey, if you go to Banff, you don't want to be around them because you can't have the steak or the wine. before or after. You better take care of it

I would be offended by that. We would not be here if La Sierra had made

MR. McCUNE:

this decision and had done it in a appropriate way of going through the proper channels. happen for a reason. THE COURT: MR. McCUNE: All right. Ricardo Graham, as board chair, doesn't He is only one of many board That didn't happen, and it didn't

take over the powers of the board. members.

And his responsibilities were to act as a board, not to And that's exactly what he did.

act as a cowboy on his own.

I think that there can be arguments as to the appropriateness. I think, certainly, we would concede there's a

number of things there that my clients would rather had not been said. But the vast majority of what was said and read by the

Court was Lenny Darnell, not my clients. The Court has repeatedly referred to my clients as leaders of the church. La Sierra University. THE COURT: did not. Except for Mr. -- to be fair, Mr. Bradley My client had administrative positions at

There was no question Mr. Bradley was on a contract, he So the only two people that had administrative

was a teacher.

responsibility would be Mr. Kaatz and Mr. Beach. TRINA N. FEHLMAN, CSR, RPR, CRR 79

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

MR. McCUNE: the church. THE COURT:

They did, for La Sierra University, not

Right.

You're right.

And if I said the

church, I meant the university. MR. McCUNE: But it's an important distinction.

Because there's been -- if -- if the Court accepts the declarations and the other litigation and the admissions by Blackmer and Jackson that they don't have a right to make employment decisions, it appears to me that the Court has substituted its judgment as to what the motivation was for both Daniel Jackson and for Ricardo Graham. used -THE COURT: Let's assume Mr. Jackson and Mr. Blackmer I think the language

have talked to Mr. Graham, saying like this, I know this is your call, but this is what you really need to do. right thing to do. It's the only

If you don't do it, you really are violating And here's the transcript. And And you

what the church stands for.

let's say, I call you three times to make that argument. finally look at it and you make the decision. MR. McCUNE: probably is not wrong. probably not wrong. opinions. It's a lot closer call.

Is that wrong? I think it

I think the answer to that is it's

The whole 47(c) has to do with expressing And this is what the

This isn't plaintiffs' case.

jury has to decide.

Was it an expression of opinion, saying this I

is what I believe, as opposed to this is what you will do?

think if the jury concludes that those discussions were no more than expressing opinions, then I think plaintiff does lose. I think that's a factual question for the jury to decide. TRINA N. FEHLMAN, CSR, RPR, CRR 80 But

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 it.

The -- the premise of -- of the earlier part of the -I believe, the law clerk's memo, that seemed to be an underpinning for this whole thing, was an acceptance that Daniel Jackson and Larry Blackmer were acting out of church concerns. The Court has read a number of things. And the e-mail that I

read, which was Exhibit 19, make it appear that Daniel Jackson perhaps had his feelings hurt, perhaps was angry that he -- his masculinity had been questioned. That's not a church concern.

That's a personal concern, but it's not a church concern. There is a factual issue as to what was motivating Daniel Jackson and Larry Blackmer and Ricardo Graham, who also -there was a negative thing said about him on that tape. There

was some discussion, in the Court's reading of its tentative view, that what was found on the transcript was sufficient for La Sierra to terminate. the Court's -THE COURT: MR. McCUNE: No. -- terminology. But that was my take from Those are my words. That's not exactly

THE COURT:

I think you're correct.

I think had they

taken this to the board and said, we believe that this evidence shows these people have violated the morals clause or are conducting themselves in a way inconsistent with our values, and decide to go ahead and terminate them, I think that would have been okay. MR. McCUNE: what they did. THE COURT: And I think the fact that even though you 81 I think that we wouldn't be here if that's

TRINA N. FEHLMAN, CSR, RPR, CRR

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have this, which has got to offend a lot of people, they decide to take a more moderate ground and just return them to their pastoral positions -- they had some words for what they did -their tenured positions and so forth, to allow them to sit out their contracts and so forth, I mean, it's hard to -- it's hard to criticize that level of mercy. MR. McCUNE: Well, there's no level of mercy. These --

these defendants absolutely intended to fire my clients until we got involved. whatsoever. THE COURT: But doesn't the resignation, before you got I don't accept that they showed any mercy

involved, just say they resign their position of -- as dean and the other position? MR. McCUNE: It absolutely does. And conversations

that happened that Monday and Tuesday made clear that they intended to terminate my clients. THE COURT: MR. DAGGETT: THE COURT: Okay. Your Honor -I understand that's outside the record.

But go ahead, you may continue. MR. McCUNE: The -- the additional -- so -- but I guess

my point on that issue is the clients weren't terminated by La Sierra University. They didn't say, you're terminated. They

said, we're going to accept a resignation letter that was obtained under coercion and misrepresentation, so it is not even before the Court as to whether this was grounds for termination, if it had gone through the normal channels. To the extent La Sierra could argue that it was because TRINA N. FEHLMAN, CSR, RPR, CRR 82

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it was after-acquired evidence -THE COURT: Understand, when you say -- I'm not

agreeing with you that it was inappropriate coercion or coercion or that it's misrepresentation. But you may continue. We may --

we disagree about that, but I want to make clear that I might not be in agreement with what you say, but you have a right to say it. So I'll let you finish. MR. McCUNE: So the point was that what had happened

was there was a signing of a resignation letter under duress, coercion, misrepresentation, and plaintiffs have established or put forth facts that would support that's a triable issue of fact. Therefore, there was nothing for the board, when they

finally acted appropriately as a body, to accept that resignation. So there was not an effective resignation, and

there never was termination proceedings. The Court had indicated in part of the discussion that this was a church-run university. At least, that was my

interpretation of what the Court said. THE COURT: No, not in the direct sense of, like, the What I think is fairly clear is that the

Pope calling the shots.

church created the university to help facilitate the mission of the church, that there are central core values down to the various levels of the organization that the university is supposed to live up to that are included in the bylaws and the mission statement of the church. And that while the church is

not -- and again, you have to separate whether it's the general counsel, the North Admission (sic) Division, or some other level, they did not have the authority -- Mr. Blackmer and Mr. Jackson TRINA N. FEHLMAN, CSR, RPR, CRR 83

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did not have authority to hire, fire.

I think it was Mr. Wilson, It

who's head of the general counsel, he did not have authority. was -- the board had set up -- the board, which was chaired by

Mr. Graham, who is also president of the PCU (sic), that had the authority. So again, the way the Seventh-day Adventists have organized themselves, they do, in fact, give autonomy for more local decisions to the local people. But there's a larger

expectation that people live up to the core values of the Seventh-day Adventist Church, that they're concerned when they don't do so. And they express their opinions, and they have a And that -- it

right to persuade people to act in accordance.

seems to me that Mr. Graham, as chairman of the board for the PCU and the PCU board, has a right to act, and that they were acting as they saw consistent with the larger values of the church. So it's -- it's a somewhat complicated, understandable, and probably, in my view at least, a good system, I think, to have this type of organization, allow local groups to accommodate values of their communities, so long as it's within a larger umbrella. houses. houses. In other words, we don't have to all build A-frame We can build Craftsman houses. We can build ranch

And who cares, so long as the message gets out and the

people do well. But then, there are certain core values -- certain core values. And unfortunately, apparently evolution and creation is

one of those core values that causes considerable contention. And if the church, the guy at the top all the way through it, accepts -- expects that to be part of the curriculum and exerts TRINA N. FEHLMAN, CSR, RPR, CRR 84

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pressure upon the PCU and the board in its hiring and firing process to enforce that, I think they can do so. And I think

that's a question of freedom of religion that this Court cannot be entangled with. Okay? And the -- I would take -- I would The Court's characterization of how

MR. McCUNE:

disagree with the Court.

this process worked is what plaintiffs believe -- and plaintiffs believe the facts they have presented provide an inference that the church leaders providing their opinions -- and even repeatedly providing their opinions is not what happened here. It was church leaders bypassing La Sierra and instructing Dr. Graham, as president of the PUC, as to what to -- to do. And there -- the discussion as to evolution and creation would suggest that I think I need to address that this Court somehow has to get in the middle of whether the Seventh-day Adventist church doctrine is right, wrong, or indifferent on creation versus evolution. There has been no indication anywhere

that, certainly, for Dr. Kaatz or Dr. Beach, that they had any involvement in that issue. Their -- as to whether the defendants They

had -- I mean, they weren't -- they weren't teaching. weren't in any magazines.

There's no discussion that would

indicate that their -- their position on that was any different than the church, or even if it was different than the church, that it would any way hinder their view of performing their jobs as dean of the school and in development. But the -- the concept that I struggle with is that La Sierra University is completely separate from the church when the church doesn't want to take responsibility for what La Sierra TRINA N. FEHLMAN, CSR, RPR, CRR 85

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University does.

But the second that it disagrees with La Sierra

University, it says, forget that whole separation that we've talked about with vicarious liability. We now -- we're all one

big church, and we're going to dictate what happens. I think that in making the decision to separate La Sierra from Loma Linda and to become a separate institution, as we find in the declarations, they gave up that right to dictate. They didn't have to. They chose to.

The Court used the term "auspices," relating to La Sierra, in its discussion. case, I was unfamiliar with. And that's a term, before this But in deposition testimony, the

Graham -- not Graham, excuse me -- Blackmer and Jackson indicated that three universities in the system that they owned and controlled, which was Loma Linda and Andrews and Oakwood College, were under their auspices, under their control. They -- the --

in setting up these universities, they distinguished between the auspice of control and -- and what was the situation with La Sierra University. The Court cited Silo. operated. And Silo was a church, owned and

Plaintiffs absolutely are not taking the position that

if all this had happened under a church-owned-and-operated institution, that there would be any cause of action, or we would agree that the First Amendment would be implicated. That's what

all of the cases are about that talk about the First Amendment issue, when there's ownership and control. It seems to me that

there's been a merging of this 47 interest with ownership and control, in order to reach the -- the First Amendment issue. At least in my notes, I had a summary that the Court TRINA N. FEHLMAN, CSR, RPR, CRR 86

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had concluded that the process of obtaining the resignation letters was not extreme or outrageous. is a question of fact for the jury. I would suggest that that

The Court may reach one

conclusion, but there is sufficient evidence, in our view, for the jury to reach a different conclusion. And the Court, as a

gatekeeper function on that issue, should let that go forward to the jury. So I guess, your Honor, in summary, which I'm sure your Honor is ready for, is that there are triable issues of fact as to the relationship between La Sierra University and the church defendants that influence whether these defendants had the right to dictate to La Sierra University the employment decisions. We

have established facts, as I've discussed before, that -- that, at least, make a triable issue of fact that they are a separate institution that are affiliated with La Sierra -- with the church. But that does not allow for the church to simply dictate

what happens at the university if they elected not to make it a bible college, they elected not to put it under the auspices of the church. change that. The other issue that we believe is there is a factual issue that is well-established that makes it a triable issue of fact as to what the motivation for Blackmer and Jackson were in -- in taking the action and then, further, the -- there are triable issues of fact as to whether there was direction from Jackson to Graham as to what actions he was -- he was going to take. So I appreciate the Court's patience to allow me to go TRINA N. FEHLMAN, CSR, RPR, CRR 87 And they're stuck with that, unless they want to

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through those things.

But those -- unless the Court has any

further questions or comments, that that's -THE COURT: I want to say, Mr. McCune, that even though And I And

we disagree, I think highly of your skills as a lawyer.

appreciate the clearness and quality of your presentation. some people argue in a way that I can't even understand what they're saying. appreciate that. MR. McCUNE: THE COURT: Thank you very much, your Honor. And so I'll -- again, Mr. Daggett and I do not have that problem with you. So I

Mr. Connally, you didn't have a chance to say as much. seen the work you've done. be.

But I've

But that's what the ruling's going to

So rather than preparing a order for me to sign that is so complicated and long that it invites further litigation -I've been rather thorough on the record. So I would suggest that

you prepare an order that says the Court grants the motion for summary adjudication as to all four named defendants on all issues and grants the motion for summary judgment for the reasons stated on the record. The Court rules that that's the

appropriate way to do it. And then the Court of Appeal can take this up. And

they can discuss it, and they can address whether I'm wrong or not. And that'll be an opinion that I will very much enjoy

reading when it comes down. MR. CONNALLY: THE COURT: Thank you, your Honor.

On summary judgment motions, if you're

right when you grant them 50 percent of the time and upheld by TRINA N. FEHLMAN, CSR, RPR, CRR 88

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the Court of Appeal, you have a batting average that is better than most. So good luck to you all. Thank you.

(Proceedings adjourned.)

TRINA N. FEHLMAN, CSR, RPR, CRR 89

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