1 IN THE CIRCUIT COURT OF THE STATE OF OREGON

2 FOR THE COUNTY OF CLACKAMAS
3 TIM REEVES, ERIC SAUB, GREG )
BURNETT, as the Libertarian )
4 Party of Oregon; DAVID TERRY,)
M. CARLING and RICHARD BURKE,)
5 as members of the Libertarian)
Party of Oregon, )
6 )
Plaintiffs, ) Clackamas County
7 ) Circuit Court
and ) No. CV12010345
8 )
CARLA PEALER, as the ) CA A155618
9 Libertarian Party of Oregon, )
)
10 Plaintiff, ) Volume 5 of 5
)
11 v. )
)
12 WES WAGNER, HARRY JOE TABOR, )
MARK VETANEN, BRUCE KNIGHT, )
13 JEFF WESTON, JIM KARLOCK, )
RICHARD SKYBA, and JEFF )
14 WESTON, individuals; and )
LIBERTARIAN PARTY OF OREGON, )
15 )
Defendants, )
16 )
and )
17 )
JOSEPH SHELLEY, )
18 )
Defendant. )
19
20 TRANSCRIPT OF PROCEEDINGS ON APPEAL
21 BE IT REMEMBERED that the above-entitled
22 Court and cause came on regularly for hearing before
23 the Honorable Henry C. Breithaupt, on Thursday, the
24 1st day of August, 2013, at the Clackamas County
25 Courthouse, Holman Hearing Room, Oregon City, Oregon.
Appearances 271
1 APPEARANCES
2 Tyler Smith, Attorney at Law,
Appearing on behalf of the Plaintiffs;
3
Robert Steringer, James Leuenberger and
4 Colin Andries, Attorneys at Law,
Appearing on behalf of the Defendants.
5 * * *
6
KATIE BRADFORD, CSR 90-0148
7 Court Reporter
(503) 267-5112
8
Proceedings recorded by digital sound recording;
9 transcript provided by Certified Shorthand Reporter.
10 * * *
11 GENERAL INDEX
12 VOLUME 5
13 Page No.
14 August 1, 2013 Proceedings 272

15 Case Called; Parties Introduced 272
16 Defendants' Motion for Findings 273
17 Plaintiffs' Argument by Mr. Smith 319
18 Defendants' Argument by Mr. Steringer 326
19 Matter Taken Under Advisement 326
20 Reporter's Certificate 328

21 * * *
22
23
24
25
272
1 (Volume 5, Thursday, August 1, 2013, 10:44 a.m.)
2 P R O C E E D I N G S
3 (Whereupon, the following proceedings
4 were held in open court:)
5 THE COURT: All right. Is everyone here
6 for Reeves versus Wagner? Please come forward.
7 (Whispered discussion, off the record,
8 10:44 a.m. - 10:45 a.m.)
9 THE COURT: Okay. We are on the record
10 in Reeves versus Libertarian Party of Oregon and
11 others.
12 If counsel would introduce themselves
13 for the record.
14 MR. SMITH: Thank you, Your Honor.
15 Tyler Smith for the plaintiffs. With me are
16 Mr. Tim Reeves, Mr. Greg Burnett, Mr. Richard Burke.
17 THE COURT: Okay.
18 MR. LEUENBERGER: James Leuenberger for
19 Mr. Wagner.
20 MR. STERINGER: Bob Steringer for the
21 Libertarian Party of Oregon.
22 THE COURT: Thank you.
23 MR. ANDRIES: Colin Andries for the
24 remaining defendants.
25 THE COURT: Thank you. All right. We
273
1 are here on defendants' motion for findings under
2 20.105, correct?
3 MR. STERINGER: That's correct,
4 Your Honor.
5 THE COURT: If those findings were made
6 as -- if, big word -- if those findings were made as
7 you request them to be made, that would be -- as I
8 understand, it would be a step, but only a step in
9 the process of obtaining an attorney fee award under
10 Rule 68. Am I correct?
11 MR. STERINGER: That is correct,
12 Your Honor.
13 THE COURT: Any different view?
14 MR. SMITH: That's correct, Your Honor.
15 THE COURT: And following -- and, of
16 course, if they were not made, things would end. But
17 if they were made, then we would move -- would we
18 then be -- we would then be beyond the entitlement
19 stage and we would be to the amount stage of the Rule
20 68 proceeding.
21 MR. STERINGER: That's right,
22 Your Honor. We would expect that after this
23 proceeding is closed, I -- I hope that we can work
24 with plaintiffs' counsel to agree on a form of
25 general judgment that we could submit.
274
1 And following that, we would submit a
2 statement of attorney fees under Rule 68.
3 THE COURT: Any different view,
4 Mr. Smith?
5 MR. SMITH: I think that's procedurally
6 how it would go, Your Honor.
7 THE COURT: Okay. Very good. Thank
8 you. By the way, you're welcome to remain seated.
9 If you wish to stand, you're welcome to, but you
10 don't need to.
11 MR. STERINGER: Thank you.
12 THE COURT: All right. So -- and I'm
13 just going to look at plaintiffs' motion. Obviously,
14 the heart of this is that, "Plaintiffs' claims lacked
15 an objectively reasonable basis at the time they were
16 filed for two reasons: One, the law of," I'll call
17 it, the First Amendment.
18 "Secondly, the arguably preclusive or
19 other effect of the prior ruling of Judge Hernandez
20 in Wagner v. Libertarian Party of Oregon."
21 And then a series of other statements of
22 fact. For example, Plaintiff Richard Burke claimed
23 to speak for all plaintiffs; Plaintiff Richard Burke
24 directed the LPO's participation in the Circuit Court
25 case in Washington County, that sort of thing.
275
1 Then a conclusion, defendants are
2 entitled to recover reasonable attorney fees under
3 2105 and would be awarded pursuant to 68.
4 Okay. So my first question, given the
5 nature of some of these statements in the motion is
6 did anybody expect to put on evidence today or have
7 you put your evidence in in the form of affidavits or
8 other matters?
9 MR. SMITH: Your Honor, I did not
10 expect -- did not expect to put on evidence, but
11 there is an development that's arisen that I was
12 going to bring up in my oral argument.
13 THE COURT: And that development is --
14 MR. SMITH: That development is the
15 Libertarian Party of Oregon's general counsel, Oren
16 Grover, who had been the general counsel of the party
17 before this dispute arose is still in possession of
18 physical property and furniture, furnishings, office
19 supplies and the records and files of the Libertarian
20 Party of Oregon.
21 He was waiting for and is still waiting
22 for this Court to decide this matter in order to know
23 whom to give that property to. He called me last
24 week and told me his intention of filing a motion to
25 intervene based on this Court's, you know, current
276
1 order, and called me this morning letting me know
2 obviously he had not had a chance to do that, but
3 asked me the inform the Court he didn't, and expect
4 to do that.
5 THE COURT: Intervene in what?
6 MR. SMITH: In this dispute. Ask this
7 Court to do something so that somebody knows who's
8 got the property.
9 THE COURT: To intervene in this dispute
10 regarding attorney's fees?
11 MR. SMITH: No, Your Honor, in the
12 lawsuit, in the larger lawsuit.
13 THE COURT: Then why would that in any
14 way affect what we're doing here this morning? Maybe
15 -- maybe you weren't suggesting that it would. Maybe
16 you were just reporting to me a development.
17 MR. SMITH: Yes. That's basically it,
18 Your Honor.
19 THE COURT: Okay. Mr. Steringer, are
20 you aware of this? Well, I suppose it in the nature
21 of -- he may be -- he may be in a position of someone
22 who wishes to in plead the furniture and equipment.
23 MR. STERINGER: That was the thought
24 going through my mind. I am aware of the fact that
25 Mr. Grover has these materials and we've been in
277
1 discussions about how to deal with them. This is
2 news to me that Mr. Grover might think that
3 intervention is the way to resolve that.
4 THE COURT: Well, Mr. Grover -- is
5 Mr. Grover himself an attorney?
6 MR. SMITH: He is, Your Honor.
7 THE COURT: Okay. I guess you did say
8 that, didn't you?
9 MR. SMITH: And I mentioned that. You
10 asked about the facts. There was an e-mail that he
11 was written to Mr. Steringer that I was going to read
12 from where he was saying that having been present at
13 the board meeting when the judicial committee was
14 eviscerated and the --
15 THE COURT: Hold it. Hold it. Hold it.
16 MR. SMITH: That's what I was going
17 to -- okay. I won't.
18 THE COURT: At this stage, all I want to
19 hear about for now is -- well, you said there's a
20 development. The development is someone named Grover
21 is uncertain what to do with the things he -- of
22 which he has physical possession. He'll figure that
23 out, I'm sure. It's not an unusual problem.
24 But -- well, it doesn't occur that
25 often, but it's not that unusual. The law has ways
278
1 of dealing with determining what a custodian of some
2 property should do when they are maybe two or more
3 parties contending for it. But we're here now and
4 you do not have -- anything for the record? Any
5 evidence to be taken today?
6 If not, let's go to a discussion of what
7 I have already in the record.
8 MR. STERINGER: Defendants do not intend
9 to offer additional evidence.
10 THE COURT: All right. I can have -- I
11 can have you repeat your -- what you've written in
12 your papers and I will do that for the purpose of
13 having a brief discussion.
14 Mr. Smith, let's take the -- the law of
15 the First Amendment. Let's -- let's -- because it's,
16 A, it's first; and, B, it's the First Amendment.
17 And I know you've said, for example,
18 "Well, there's somebody at the Secretary of State's
19 office who said X and that ought to be enough for us
20 to get beyond an attorney fee exposure."
21 Mr. Steringer, for example, says, "No,
22 you know, that can't be." So let's just take the
23 points you've raised in your paper and move fairly
24 quickly.
25 MR. SMITH: Okay.
279
1 THE COURT: Anything to add to -- I
2 mean, I think Mr. Steringer is basically saying,
3 "Well, now, just a moment. You can't go out and say,
4 'Well, I saw somebody on the street and I asked him
5 about this and'" -- no, he's not quite saying that,
6 'cause after all, he's an employee of the Secretary
7 of State.
8 But how does that give you an
9 objectively reasonable basis? Remember, we -- that's
10 divided in the statute or in the case law into fact
11 and law. I'm assuming you're claiming law. That is,
12 the shield you want is a legal shield or a shield
13 regarding the legal basis, not the factual basis.
14 MR. SMITH: Yes, Your Honor. Let me try
15 to answer that. And I'll direct you towards the
16 First Amendment, as you said.
17 I don't believe that the defendants here
18 made a big distinction in their motion on whether
19 they were saying our argument's on fact or law were
20 their basis, so we're addressing both in our
21 memorandum. And today, I'm addressing both. But I
22 think you're right.
23 Motion -- subject matter jurisdiction,
24 the case on point on that is -- is Specialty Risk
25 Services, 213 Or App 620, 624 to 625 is a question of
280
1 law, so --
2 THE COURT: No, no, no, no, no. What
3 I'm saying is this. Unless I'm missing something,
4 what Mr. Steringer is saying is, "Look. My clients
5 have been put to a lot of trouble and expense by
6 Mr. Smith's clients. Mr. Smith's clients didn't have
7 an objectively reasonable basis for starting this
8 fight. They should have known.
9 "In fact, they knew. They had used
10 exactly the same legal doctrines themselves
11 successfully." And in the face of that, under the
12 First Amendment, forget the preclusive effective
13 whatever Judge Hernandez said, Mr. Steringer at this
14 point is simply saying, "You can't say, 'Well, we
15 didn't know about the First Amendment doctrines that
16 say Courts stay out of fights.'
17 "And because you knew about them or
18 should have known about them, when you take" -- this
19 is Mr. Steringer talking -- "when you take my clients
20 around the block and they have to hire me and spend
21 money and then you lose for precisely the reason that
22 you lost, it's objectively -- that -- I ought to get
23 attorney's fees under 2105, because I pass over the
24 somewhat high hurdle of no objectively reasonable
25 basis in law."
281
1 MR. SMITH: And, Your Honor, I'm -- I'm
2 going there. I didn't even get a chance to state the
3 standard that I think we're subject to. I disagree
4 100 percent with the hypothetical argument that
5 you're saying he's making, the argument that he's
6 making on that.
7 First amendment, the reason the First
8 Amendment does not operate the way they say, going
9 directly to the First Amendment -- and I'll address
10 the Secretary of State in this. The First Amendment
11 -- first, we're not saying solely because the
12 Secretary of State said that, that alone is the only
13 reason.
14 THE COURT: Mm-hmm.
15 MR. SMITH: Here -- here the legal
16 standard under Williams is entirely void of legal or
17 factual support. And here we have support on both of
18 those. We have lots of support. The Secretary of
19 State's statement that you have to go to court is
20 factual support.
21 It's factual support that a reasonable
22 attorney would listen to the director of elections
23 when he says, "The only way to resolve this elections
24 dispute is by going to court."
25 THE COURT: Stop just a moment. You're
282
1 claiming it's factual support.
2 MR. SMITH: The director of elections --
3 it's factual support for that.
4 THE COURT: Are you claiming it's legal
5 support?
6 MR. SMITH: It would go to that. I mean
7 the director of elections has --
8 THE COURT: Well, here. Let's try this
9 again. It's a simple question. It requires either
10 yes, no or I don't know.
11 Are you claiming that the statement of
12 the Secretary of State's employee is legal support
13 for your having brought the claim?
14 MR. SMITH: It would be both,
15 Your Honor.
16 THE COURT: Okay. Now, Mr. --
17 MR. SMITH: The director of elections
18 has -- I'm sorry.
19 THE COURT: Mr. Steringer, what do you
20 say?
21 MR. STERINGER: The -- the opinion of
22 Mr. Trout would not provide factual support for the
23 claims that were alleged. And I -- I think it's
24 important that we -- we, here, draw a distinction
25 between the claims that were alleged and the
283
1 subjective mindset of the plaintiffs in deciding
2 whether or not to file their claims.
3 THE COURT: Because subjective -- it's
4 objectively reasonable is the standard.
5 MR. STERINGER: Exactly. And if
6 Mr. Trout said something to Mr. Smith that would make
7 Mr. Smith and his clients subjectively believe that
8 they had a stronger case than they actually had,
9 that's irrelevant. So then the question is: Did
10 Mr. Trout's statement have any factual bearing on the
11 claims themselves?
12 And I honestly can't -- I can't draw any
13 -- any connection between Mr. Trout's statement and
14 the claims that were alleged here as far as being
15 relevant to those claims.
16 THE COURT: Okay. Mr. Smith?
17 MR. SMITH: Your Honor, Mr. Steringer
18 made the exact same claim that we made for
19 declaratory relief. His first counterclaim is
20 declaratory relief.
21 How could it be objectively unreasonable
22 for us to make a declaratory relief claim -- for him
23 to make a declaratory relief claim and for only for
24 us for it to be objectively unreasonable?
25 THE COURT: Easy.
284
1 MR. SMITH: Then how -- how could --
2 THE COURT: It's easy. I mean, come on.
3 Look. There are winners and there are losers. The
4 reason we have the attorney fee statute is when you
5 lose and you lose for a really good reason that you
6 knew or should have known about, you get to pay the
7 other side's fees because you can't just take them
8 around the block.
9 MR. SMITH: And -- and, Your Honor,
10 that --
11 THE COURT: And there's -- and to answer
12 your question, that's what happens. I mean,
13 otherwise, everybody who not only defended against a
14 claim but made a currently claim would be faced with
15 the argument, "Well, you can't recover attorney's
16 fees because, after all, you made a claim as well."
17 I mean, that's ridiculous.
18 MR. SMITH: I'm pointing it out,
19 Your Honor, because it's the exact same claim.
20 THE COURT: I don't care. It's
21 ridiculous. You lost. They won.
22 MR. SMITH: And, Your Honor --
23 THE COURT: I'm saying they necessarily
24 get attorney's fees, but the argument that because
25 they fired back, therefore, my having taken out the
285
1 gun and shot it first is okay?
2 MR. SMITH: Your Honor, that's not --
3 that's not where I was going with that. The reason
4 that it's that way is they made the claim that it was
5 objectively reasonable from the get-go. Judge
6 Redman --
7 THE COURT: Wait, wait. Hold it.
8 MR. SMITH: The defendants --
9 THE COURT: Hold it. They made the
10 claim that what was --
11 MR. SMITH: The defendants have made the
12 claim that our -- made the argument that our claims
13 were objectively reasonable from the get-go.
14 THE COURT: Objectively reasonable?
15 MR. SMITH: Objectively unreasonable.
16 THE COURT: That's what I didn't follow.
17 MR. SMITH: However, they made that
18 exact same -- they made the argument, this exact same
19 summary motion subject matter jurisdiction argument
20 to Judge Redman. Judge Redman ruled that we did have
21 jurisdiction. How could it --
22 THE COURT: Was this --
23 MR. SMITH: -- it could not be
24 objective --
25 THE COURT: Was this argued as a subject
286
1 matter jurisdiction claim?
2 MR. SMITH: It was, Your Honor. July --
3 the order came out July 10th, 2012. We twice briefed
4 that exact issue and we twice had oral argument on
5 this exact issue. April 9th --
6 THE COURT: Now, wait. Hold it. Hold
7 it. I'm done -- I don't want to hear this for the
8 15th time. I've heard it too many times. I mean, I
9 know it's there. I don't need to hear it again. I
10 mean, now we need to analyze it.
11 What's the significance of what
12 Judge Redman ruled? First of all, what did
13 Judge Redman do?
14 MR. SMITH: That's why I was talking
15 about the question of law, Your Honor. Subject
16 matter jurisdiction in Oregon is a question of law.
17 He --
18 THE COURT: No, no. Listen. Listen,
19 please.
20 MR. SMITH: -- ruled on a question of
21 law.
22 THE COURT: What did -- well, first of
23 all, what did he do? He entered an order, right?
24 MR. SMITH: Correct.
25 THE COURT: In the face of a motion
287
1 for --
2 MR. SMITH: To dismiss.
3 THE COURT: On the basis of --
4 MR. SMITH: Jurisdiction.
5 THE COURT: And he said --
6 MR. SMITH: And other things.
7 THE COURT: -- there's jurisdiction.
8 MR. SMITH: Correct.
9 THE COURT: How does that get you
10 around -- I mean, Judge Hernandez had jurisdiction
11 when he decided, "We don't get into -- Courts don't
12 get into political party squabbles." I don't see
13 what's a jurisdiction question.
14 MR. SMITH: Your -- your ruling said
15 that this Court didn't have jurisdiction. They
16 argued -- they're argument was that this Court didn't
17 have jurisdiction under the First Amendment.
18 THE COURT: Mr. Steringer?
19 MR. STERINGER: Our argument was that
20 the claims were not judicable.
21 THE COURT: Right.
22 MR. SMITH: And what we pointed out is
23 that the claims are judicable. Now, let me get to
24 the First Amendment piece that they are judicable,
25 because when we look at the Eu case, the whole of the
288
1 Eu case, the facts are so dissimilar to this case.
2 THE COURT: I'm not worried about the Eu
3 case.
4 MR. SMITH: In -- in the Cousins v.
5 Wigoda case, the facts were so distinguished in the
6 Cousins v. Wigoda --
7 THE COURT: Mr. Smith --
8 MR. SMITH: -- that we're here in the
9 middle.
10 THE COURT: Mr. Smith -- Mr. Smith,
11 every single case that I've seen is a winner for
12 Steringer and a loser for you.
13 MR. SMITH: Your Honor --
14 THE COURT: With the exception perhaps
15 of the cases that Mr. Steringer points out were some
16 -- were a group in change for receiving federal
17 funding agreed by contract to do certain
18 (indiscernible).
19 MR. SMITH: Your Honor, we listed out
20 five cases that were from Federal District Courts
21 where the Court specifically interpreted, applied
22 bylaws and incorporated Robert's Rules because it was
23 incorporated in those bylaws to adjudicate that
24 dispute. That's all we were asking for, for this
25 Court to take --
289
1 THE COURT: Mr. Steringer?
2 Mr. Steringer, do you recognize these five cases?
3 MR. STERINGER: We have provided
4 briefing on that and I can -- I actually brought
5 them, I believe. We can go through and --
6 THE COURT: Why don't we?
7 MR. STERINGER: -- talk again about --
8 MR. SMITH: Okay.
9 MR. STERINGER: -- why not one of those
10 cases involved a Court deciding what bylaws were in
11 effect for a political party or deciding the identity
12 of leaders within a party.
13 THE COURT: Internal governance.
14 MR. SMITH: But they also --
15 MR. STERINGER: Deciding an internal
16 dispute, correct.
17 THE COURT: All right. Why don't you --
18 MR. SMITH: But none of them say you
19 can't do it either. That's the point.
20 THE COURT: Oh, now, that -- okay.
21 Right now -- hold it. Loser. Big loser. Doesn't
22 help you. Hurts you.
23 MR. SMITH: I've cited them, Your Honor.
24 And --
25 THE COURT: No, no, sir, please.
290
1 MR. SMITH: I understand.
2 THE COURT: Saying that they -- you need
3 something. You can't say, "Well, they don't say it.
4 They don't -- they don't tell me what" -- you know
5 the point.
6 MR. SMITH: I know the point,
7 Your Honor. I -- I've put in the parentheticals in
8 those cases. You want me to just hold on for a
9 minute?
10 THE COURT: Yes. What's the first case?
11 MR. SMITH: First, there's Reform Party
12 v. Gargan.
13 THE COURT: Mr. Steringer. Gargan.
14 MR. STERINGER: Gargan involves the
15 Reform Party, which was receiving federal funds under
16 the Presidential Election Campaign Act; and,
17 therefore, had to agree to be bound by certain
18 organizational requirements.
19 THE COURT: This is the contract
20 argument, essentially.
21 MR. STERINGER: Correct, Your Honor.
22 MR. SMITH: And they specifically
23 applied their Constitution and Robert's Rules of
24 Order in that case to make the outcome of the case.
25 THE COURT: Was it decided under the
291
1 First Amendment?
2 MR. SMITH: No. The First Amendment had
3 nothing to do with it.
4 THE COURT: No. Thank you. Good.
5 First Amendment had nothing to do with
6 use. You could not have said it more eloquently.
7 Next. It's irrelevant.
8 Next.
9 MR. SMITH: Your Honor, I would -- I
10 would -- I'll go move on.
11 THE COURT: No. It's irrelevant
12 because --
13 MR. SMITH: They can do it.
14 THE COURT: It arises by contract. They
15 agreed that they would do certain things in exchange
16 for funding.
17 MR. SMITH: And --
18 THE COURT: It wasn't a free-standing,
19 "Courts are now going to intervene and tell you how
20 to run your affairs."
21 MR. SMITH: And as you pointed out,
22 there's contracts in this case. There's
23 free-standing contracts that will be enforced.
24 THE COURT: Mr. Smith.
25 MR. SMITH: Okay.
292
1 THE COURT: Next case.
2 MR. SMITH: Jackson v. Riddell. The
3 court was specifically --
4 THE COURT: Hang on. Hang on. Jackson
5 v. --
6 MR. SMITH: Riddell, R-i-d-d-e-l-l.
7 THE COURT: Mr. Steringer.
8 MR. STERINGER: My understanding of that
9 case is that the -- the Court, which was the Northern
10 District Court for Mississippi back in 1979 before
11 the Eu case was decided, I believe. Yes, ten years
12 before.
13 In that case, the Court refused to hear
14 the parties' dispute, because the plaintiffs failed
15 to use intraparty dispute resolution.
16 MR. SMITH: And they said, specifically,
17 there's an intraparty rule, that they enforced the
18 intraparty rule.
19 THE COURT: Next.
20 MR. SMITH: Reform Party v. Bysiewicz.
21 Specifically, the Court reviewed and enforced the
22 bylaws.
23 THE COURT: Hang on. Hang on.
24 Bysiewicz, Mr. Steringer.
25 MR. STERINGER: Well, that's -- that's
293
1 the second of the two cases involving --
2 THE COURT: Second of the two Reform
3 cases, right?
4 MR. STERINGER: That's correct,
5 Your Honor.
6 THE COURT: Okay. Next.
7 MR. SMITH: They -- we also have the
8 Democratic Farm Labor Central Committee v. Holm was
9 citing Fosser (phonetic) --
10 THE COURT: Hold it. Holm? H-o-l-m?
11 MR. SMITH: Yes. And this is an older
12 case.
13 THE COURT: Now, Mr. Steringer on that?
14 MR. STERINGER: A 1948 case from
15 Minnesota where the Court said that where there's --
16 where there's involved no controlling statute or
17 clear right based on statute law, the Courts will not
18 assume jurisdiction, but will leave the matter for
19 determination within the party organization.
20 And that is in reference to factual
21 controversies within a political party.
22 THE COURT: And you take comfort from
23 this case why, Mr. Smith?
24 MR. SMITH: Because it's -- it's stating
25 back to Fosser that says the Court --
294
1 THE COURT: Stating back to whom?
2 MR. SMITH: State v. Fosser.
3 THE COURT: Is that another of the
4 cases?
5 MR. SMITH: It's another case that says
6 the court can have jurisdiction over these disputes.
7 And I would -- you know, I would ask the Court if --
8 THE COURT: State v. Fossor, do you --
9 MR. STERINGER: Fosser's from North
10 Dakota in 1900 where the Court did two things. It
11 had to decide which party was going to go on -- or
12 which candidate was going on the ballot and so the
13 Court refused to pass judgment on the parliamentary
14 tactics that occurred within a convention, saying
15 that those are matters that they could not get into,
16 but they did have to decide which candidate for
17 county auditor was going to be placed on the ballot.
18 MR. SMITH: And every single one of
19 these cases had an internal party dispute where the
20 Court relied on bylaws, interpreted bylaws and
21 applied bylaws and internal rules.
22 THE COURT: Not according to
23 Mr. Steringer.
24 MR. SMITH: I would ask this Court to
25 take a look at those cases before issuing a decision.
295
1 THE COURT: Well, what Mr. Steringer --
2 well, how can Mr. Smith be of such a view and you be
3 so strongly of such a different view? Is he speaking
4 a different language?
5 MR. STERINGER: Your Honor, I think we
6 just read the cases differently.
7 THE COURT: Okay.
8 MR. SMITH: Your Honor, and that's the
9 point that I wanted to make at the very beginning of
10 this. Reasonable -- reasonable people can disagree
11 about the law. Reasonable attorneys can disagree
12 about the law. Even in this case, we've seen
13 reasonable judges disagree about this question
14 of law.
15 THE COURT: I'm not sure we've seen
16 that.
17 MR. SMITH: Well, I would -- I -- my
18 argument is that --
19 THE COURT: I know it's your argument.
20 MR. SMITH: Okay.
21 THE COURT: But how can reasonable
22 people who have once been victorious on a doctrine
23 then turn around and decide, "Now we're going to take
24 the diametrically opposed position and raise heck
25 with our opponents"?
296
1 MR. SMITH: Your Honor, we were not
2 victorious on this doctrine previously.
3 THE COURT: Mr. Steringer, were they?
4 MR. STERINGER: If we're talking about
5 the Washington County --
6 THE COURT: Yes.
7 MR. STERINGER: -- case? Yes.
8 MR. SMITH: Your Honor, one of my
9 clients was tangentially involved in that because he
10 was employed. The rest of my clients were not
11 involved in that. Some of them were not even
12 involved in the Libertarian Party at the time.
13 In that case, as we talked about, your
14 opinion didn't mention -- even mention the word
15 "issue preclusion," their argument. And so that, the
16 issue preclusion thing --
17 THE COURT: Mr. Smith, that wasn't my
18 question.
19 MR. SMITH: Okay.
20 THE COURT: My question was what -- what
21 do I do, if anything, at this stage, because now I'm
22 looking at objectively reasonable basis in fact or
23 law. And I note in the record you've presented to me
24 material that suggests, more than suggests that when
25 the shoe is on the other foot.
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1 And does the record show, Mr. Steringer,
2 that these plaintiffs knew about the Washington
3 County matter?
4 MR. STERINGER: Well, what the record
5 shows is that Mr. Burke, one of the plaintiffs, was
6 intimately involved in the defense of the Washington
7 County matter on behalf of the Libertarian Party,
8 which was the defendant in that case.
9 And we've provided -- we've provided
10 evidence of that in connection with the summary
11 judgment motions, including billing statements that
12 reflect that.
13 THE COURT: Okay. Let's take Burke.
14 Let's just take Burke. What do you say about
15 Mr. Burke?
16 MR. SMITH: Mr. Burke was an employee at
17 that time of the organization. Mr. Leuenberger
18 actually brought that claim and is the one that filed
19 the suit in the -- in the case. So if it's
20 objectively unreasonable to bring the claim, was it
21 objectively unreasonable for him to do the same
22 thing? I would say not, neither one.
23 Mr. Burke was an employee at the time.
24 He was not a named party. He was not one of the
25 parties in that case. He was not a --
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1 THE COURT: Well, first of -- hold it.
2 Hold it. Hold it.
3 It would be helpful rather than say --
4 if somebody in that case decided not to seek
5 attorney's fees against Mr. Leuenberger's clients, so
6 be it. That's not where we are today.
7 Mr. Leuenberger's clients and Mr. Steringer's clients
8 and Mr. Andries' clients are seeking attorney's fees.
9 So, again, the fact that somebody didn't
10 do something in the past isn't going to get me there.
11 What's going to get me there is we have Mr. Burke,
12 who Mr. Steringer says knew about this. After all,
13 Libertarian Party of Oregon is a legal fiction,
14 correct?
15 MR. SMITH: No, Your Honor.
16 THE COURT: It has -- it has to -- yes,
17 it is. It has no substance. You can't touch it.
18 You can't talk with it. You can only talk with
19 people who are associated with it, its agents. Would
20 you agree?
21 MR. SMITH: And it -- it has a --
22 THE COURT: And Mr. Burke was such an
23 agent, correct? Or employee, correct?
24 MR. SMITH: Correct.
25 THE COURT: And Mr. Burke was
299
1 knowledgeable about the litigation, correct?
2 MR. SMITH: Probably.
3 THE COURT: Yeah.
4 MR. SMITH: To some degree. We don't
5 have exact facts on that, but --
6 THE COURT: Well, what do we have?
7 MR. SMITH: He knew -- I would assume
8 knew something about it.
9 MR. STERINGER: Well, what we have is
10 the billing records from that case from Mr. Meade,
11 who represented the Libertarian Party, which discuss
12 his communications with Mr. Burke about the handling
13 of the lawsuit.
14 And, in fact, it was -- I think we have
15 evidence that Mr. Burke hired Mr. Meade to defend not
16 only himself, should that be necessary, but the
17 party.
18 MR. SMITH: Your Honor, the larger point
19 on that case is what was the conclusion of that case.
20 It was a writ of mandamus, an extraordinary remedy
21 and the summary --
22 THE COURT: No. Wait. What was the
23 conclusion?
24 MR. SMITH: Correct.
25 THE COURT: A writ was issued or are you
300
1 saying what was the prayer or what was the claim or
2 what was the relief requested?
3 MR. SMITH: If you're relying on that,
4 what should somebody have known about that case --
5 THE COURT: No, no, no, no, no, no, no,
6 no. I'm trying to get an answer to my question here.
7 You said the conclusion was a writ of mandamus.
8 MR. SMITH: No, no, no, no. That's not
9 what I said.
10 THE COURT: What did you say?
11 MR. SMITH: The request was for a writ
12 of mandamus.
13 THE COURT: All right.
14 MR. SMITH: And which is an --
15 THE COURT: In the Washington County
16 case, the request was a writ of mandamus directed
17 by -- by the Court directed against somebody.
18 MR. SMITH: Somebody, through some sort
19 of double-entry bookkeeping --
20 THE COURT: Okay. And --
21 MR. SMITH: -- and other -- other
22 things.
23 THE COURT: And your point is that the
24 fact that --
25 MR. SMITH: That it's a writ of
301
1 mandamus. It's a summary determination.
2 THE COURT: Yeah.
3 MR. SMITH: It has totally different
4 factual and legal standards in order to prevail on
5 such a claim.
6 THE COURT: Yeah.
7 MR. SMITH: So if no one would take away
8 from that claim that you couldn't do something else
9 in the law --
10 THE COURT: Different kind of fight.
11 MR. SMITH: Different kind of fight.
12 THE COURT: Okay. Mr. Steringer,
13 different kind of fight?
14 MR. STERINGER: Well, it was a -- it was
15 a different form of action. I think we could agree
16 on that, but it was a decision of a -- of an Oregon
17 Circuit Court on a claim that was before it.
18 And there is no law which I'm aware of
19 that suggests an issue decided in the context of a
20 writ of mandamus proceeding is entitled to any less
21 preclusive effect than one that's initiated through a
22 civil pleading.
23 THE COURT: Do you have any such law?
24 MR. SMITH: It requires a full and --
25 we've briefed that in our -- in our thing.
302
1 THE COURT: That may be, but --
2 MR. SMITH: It requires a full and final
3 determination.
4 THE COURT: -- why don't you help me
5 now?
6 MR. SMITH: It requires a full and final
7 determination, adjudication on the merits in order to
8 have any preclusive effect whatsoever.
9 THE COURT: Yeah.
10 MR. SMITH: And the point is that Ms. --
11 that Judge Hernandez said --
12 THE COURT: Well, wait, wait, wait,
13 wait, wait, wait, wait.
14 But a full and final determination isn't
15 necessarily inconsistent with, "Well, this was a
16 mandamus." You're telling me, "Well, this -- that
17 was mandamus and this is another kind of action; and,
18 therefore, can't learn anything from mandamus."
19 Then Steringer says, "No. You can learn
20 some something from mandamus."
21 MR. SMITH: You might learn something,
22 Your Honor. Judge Hernandez specifically said,
23 "You've got remedies at law. Why don't you go get a
24 declaratory relief?"
25 THE COURT: Thank you. Judge Hernandez
303
1 said, "Mandamus is -- does not lie when there's a
2 plain, speedy and adequate remedy at law. Therefore,
3 I'm not going to issue the writ," right?
4 MR. SMITH: He -- he said a lot of
5 things. I think we dispute the -- the substance, the
6 exact reason; but he did say that, yes.
7 THE COURT: Well, Mr. Steringer, my
8 summary, do you agree that what Judge Hernandez did
9 was to say, "I'm not going to issue a -- issue a writ
10 of mandamus because you have a plain, speedy and
11 adequate remedy elsewhere"?
12 MR. STERINGER: He identified the plain
13 and adequate -- plain, speedy and adequate remedy as
14 an alternative basis for denying -- for dismissing
15 the writ. The first statement he said was he doesn't
16 believe the Court can be involved in adjudicating the
17 -- the dispute that was before him. (Indiscernible).
18 THE COURT: Okay. So we have one of
19 these problems with all due respect to now federal
20 Judge Hernandez, that when a Court says two things,
21 you're not quite sure which one is -- which trumps or
22 which is dicta and which is holding.
23 Mr. Smith says the holding was plain,
24 speedy and adequate remedy. You say, "Yes, but there
25 was also a lot of talk about how Courts don't get
304
1 involved and they can't run away from that learning
2 at this stage."
3 MR. STERINGER: Well, what I -- what I
4 would say is a little more specific in that. When
5 he -- when he made his decision, the first thing he
6 said was, "Courts don't get involved in these types
7 of matters."
8 And then he said, "And even if I could"
9 -- and I'd have to -- to pull the transcript, so I'm
10 just paraphrasing.
11 THE COURT: Do I have them in my record?
12 MR. SMITH: The transcript would be
13 better, Your Honor, because I don't agree with his
14 statements.
15 THE COURT: Is it in my record that I
16 have here? And when I say my record, let me show you
17 what I consider my record to be.
18 MR. SMITH: It is. And we've cited it
19 in our briefing word for word a number of times --
20 THE COURT: Okay.
21 MR. SMITH: -- in this.
22 THE COURT: That's the official court
23 Trader Joe's bag by the way. Probably shouldn't do
24 that. Probably a trademark violation. Okay.
25 MR. SMITH: You want to get back to my
305
1 listing if you want or where are we at?
2 THE COURT: Yes, please.
3 MR. SMITH: Okay. Your Honor, the
4 other -- the other thing that we'd want to point out
5 is that the Oregon Constitution -- here, we're
6 starting at a baseline. If I can go for -- go for a
7 few minutes.
8 THE COURT: Mm-hmm.
9 MR. SMITH: We're starting at a
10 baseline, objectively reasonable.
11 THE COURT: Mm-hmm.
12 MR. SMITH: So, therefore, it's sort of
13 like what would an objective attorney do, advise?
14 What would be a claim that an objective attorney
15 would do?
16 THE COURT: Objectively reasonable
17 attorney.
18 MR. SMITH: Objectively reasonable
19 attorney or what claims would you bring? And under
20 Article XII, Section 9, the Oregon Constitution
21 authorizes circuit courts to have jurisdiction over
22 all subject matter unless it's specifically divested
23 by statute or rule. So here what we've got is an
24 arguable claim on First Amendment barring, okay?
25 You've ruled that the First Amendment
306
1 bars it. But there's no bright line rule. There's
2 no hard and fast case law. That's why I said there's
3 no case saying you can't do this. We've got general
4 jurisdiction says Circuit Courts have jurisdiction
5 over these things.
6 And there's no bright line rule that
7 says you can't do that, so a reasonable attorney
8 would say, "I see ORS 28.020 that says any person
9 with an interest in a contract, rights, legal
10 relations can get that resolved by a Circuit Court."
11 The same thing, if -- if not --
12 THE COURT: Okay. I -- I see your
13 point.
14 Mr. Steringer, are you -- you're in the
15 position I think of saying had -- well, let me ask it
16 this way. What's wrong with me saying to Mr. Smith,
17 "Okay. You win on the attorney's fees, but I never
18 ever want to see you do this again"?
19 In other words, Mr. Smith's claim is,
20 "Hey, what the heck? You know, nothing said I
21 couldn't do it. You know, it's up to me to -- to
22 zealously prosecute the claims of my clients within
23 the bounds of the law. If, as and when somebody
24 tells me on point, 'You may not do this,' I will
25 salute the flag and -- and not do it again. But like
307
1 the one free bite rule, I get to try once."
2 MR. STERINGER: First point is that
3 Mr. Burke and the Libertarian Party, which is the
4 entity through which the other plaintiffs claim to
5 act here, had their first bite in Judge Hernandez's
6 courtroom, so we're not talking about a first bite in
7 this particular case.
8 Second point is we filed a pretty
9 substantial summary judgment motion that I think
10 gives a -- a good sense of the fact that the
11 defendants dispute the merits of the claims that
12 plaintiffs made, setting aside the preclusion and
13 constitutional issues.
14 They certainly disagree and have plenty
15 to say about those claims. Nevertheless, we're not
16 here today to say that it was -- that -- that those
17 claims as stated were objectively unreasonable but
18 for the constitutional and -- and an issue precluding
19 arguments.
20 We are focused entirely on the fact that
21 the issue preclusion and the constitutional arguments
22 were present from the beginning. And while the
23 plaintiffs may have been able to invoke the Court's
24 general jurisdiction but for the constitutional and
25 -- and preclusion issues, we -- we can't just ignore
308
1 the fact that those -- that those hurdles existed
2 (indiscernible).
3 And, in fact, they were more than
4 hurdles. They were barriers over which they -- they
5 could not pass to -- to be able to assert the claims
6 that they made.
7 And, therefore, whatever they might say
8 about contracts and the Court's general jurisdiction
9 and all of that, if there was obvious in the case a
10 hurdle -- a burden that prevented them from asserting
11 their claims, that means that those claims were
12 objectively unreasonable.
13 They were wholly -- wholly devoid of --
14 of merit. Why can't we just say they get one try?
15 Well, ORS 20.105 doesn't provide that. It's a
16 statute that says that the Court shall award fees in
17 these instances.
18 THE COURT: Mm-hmm.
19 MR. STERINGER: And so if the Court does
20 make the factual findings that we've requested, we --
21 we -- we don't think the Court has the discretion to
22 then say, "We'll just give them a pass."
23 THE COURT: No, no. But you could get
24 there by saying -- and I think Mr. Smith is saying,
25 "Now, just a moment. Viewing this from the point of
309
1 view of the beginning of this particular fight, not
2 back in Washington County, but this particular fight,
3 if I surveyed all of the law and -- let's say, all of
4 the law, I could have an objectively reasonable basis
5 for concluding that I could take a shot at this."
6 "I might lose, but I could take a shot
7 at it, and if I lose, well, I'm not going to take
8 that shot again on behalf of someone else or the same
9 people, but I think I can -- I think I -- I have a
10 legitimate basis."
11 Your -- your -- your response, I think
12 you said it is, "No, no. The reason -- 2105 calls
13 upon judges to make a decision that there's a line
14 across which an objectively reasonable attorney
15 cannot pass.
16 "And an objectively reasonable attorney
17 would have looked at the law, would have
18 distinguished the cases that Mr. Smith relies upon,
19 as you've -- as you have distinguished them and said,
20 'I can't do this. I can't get there. I'm asking a
21 Court to get involved in an intra-party squabble.'
22 And when they don't do that, they get to pay
23 attorney's fees."
24 MR. STERINGER: Well -- and, in fact --
25 THE COURT: When they don't do that and
310
1 they lose.
2 MR. STERINGER: And, in fact, we see
3 within cases that the plaintiffs cite the -- the very
4 principle on which the defendants have relied, which
5 is except in those -- well, I wouldn't even say
6 except in those narrow circumstances. We do see in
7 cases like Fosser and these upper Midwest cases very
8 clear statements that the Courts are not going to get
9 involved in intraparty disputes.
10 And -- and they found ways to
11 distinguish what they were doing from being involved
12 in intraparty disputes. What we've -- what we've
13 demonstrated through this record is that this case is
14 nothing but an intraparty dispute.
15 And there was no basis upon which the
16 plaintiffs could distinguish the holdings of their
17 own authorities that they rely on. And, more
18 importantly, they completely ignore the U.S. Supreme
19 Court decisions that have come out since the cases
20 upon which they rely, which make it clear if it
21 wasn't clear before that absent a compelling State
22 interest, States can't get involved in intraparty
23 disputes.
24 And, moreover, the internal integrity of
25 the party is not a compelling State interest. It
311
1 will never be. The only time the Court can get
2 involved is when, for example, it's impacting the
3 public in a way, for example, in needing to make
4 decisions about who has ballot access.
5 MR. SMITH: Your Honor, and his argument
6 that we ignored something is complete false and
7 irrelevant. We clearly distinguished those cases way
8 back in front of Judge Redman and we won. That's --
9 I believe -- that's why I point out Judge Redman,
10 so --
11 THE COURT: Why do you keep saying you
12 won?
13 Mr. Steringer, you say he didn't win
14 something.
15 MR. STERINGER: Well, our motion -- we
16 did file a motion asking the Court to dismiss the
17 claims on the ground that -- that the Court couldn't
18 grant the relief sought because of the constitutional
19 issue.
20 THE COURT: Mm-hmm.
21 MR. STERINGER: It was on a very
22 different record. It was a skinny record, because we
23 were early in the case. And Judge Redman denied the
24 motion without comment on why he did that. I don't
25 think there's anything that we can draw from that
312
1 other than he denied a motion.
2 MR. SMITH: Your Honor --
3 THE COURT: Well, but -- but if we --
4 (indiscernible) says that you have to evaluate the
5 reasonableness at each stage -- at all stages or
6 throughout.
7 A claim that can be thought of as valid
8 at the beginning in the light of additional discovery
9 or evidence or proceedings can then be found at some
10 point going beyond that to be unreasonable.
11 But if Judge Redman did say, "I'm not
12 going to dismiss this," just as you rely upon what
13 Judge Hernandez first said in Washington County in
14 his colloquy about his decision, why can't Mr. Smith
15 rely on what Judge Herndon -- Herndon?
16 MR. SMITH: Redman. Redman.
17 THE COURT: Redman. I'm sorry. Redman.
18 What Judge Redman for this court said initially,
19 which is, "I'm not going to kick him out because of
20 this 'I can't deal with it, I'm a Court.'" Why can't
21 Mr. Smith rely on that? I'll hear from you and then
22 Mr. Leuenberger.
23 MR. STERINGER: The primary reason is
24 what -- what Judge Redman ruled -- if Judge Redman
25 ruled in a way that gave Mr. Smith and his clients
313
1 some sort of subjective belief that they might
2 have -- might have cleared that hurdle, it's
3 irrelevant. We're not here to talk about the
4 subjective views of the -- of the parties or the --
5 or the counsel.
6 The question is what was -- what did we
7 know about the case? What were the facts and what
8 were the claims that were -- that were made? And
9 Judge Redman didn't have the benefit of all the facts
10 in this case when -- when the Court made its
11 decision.
12 On the other hand, the plaintiffs did
13 know what those facts were. And so --
14 THE COURT: And what facts are those
15 that without which Judge Redman's talking about the
16 role of courts in intraparty disputes -- well, wait.
17 Maybe he didn't talk about it. Maybe he just issued
18 a ruling apparently.
19 But you talked -- you talked about it to
20 Judge Redman, what facts would have, in your view,
21 might have changed Judge Redman's ruling, which later
22 were developed, which had he known about them would
23 have perhaps affected things?
24 MR. STERINGER: The -- the facts that
25 were developed gave the entire history of the dispute
314
1 from the -- the time in which the Libertarian Party
2 adopted a reform plan and then was thwarted in its
3 efforts to implement that plan by the actions of
4 Mr. Burke and people associated with (indiscernible).
5 The -- and the -- the -- the effect of
6 that was effectively to paralyze the Libertarian
7 Party, because by -- by taking action to avoid the
8 party from organizing its annual convention, that --
9 that not only stopped the party from implementing its
10 reform plan, but also stopped it from taking any
11 other action that it normally would take.
12 THE COURT: But that kind of goes to the
13 merits, doesn't it? In other words, it goes to the
14 what's happening inside the party as opposed to can
15 judges get involved in intraparty disputes without
16 regard to how bad its gotten inside the party.
17 MR. STERINGER: The -- the reason it's
18 different is that when the dispute was before
19 Judge Redman, the plaintiffs had the entire focus of
20 the case on the question of whether the Court had a
21 -- the ability through a declaratory judgment action
22 to interpret bylaws. And the record was not
23 sufficiently developed at that time to demonstrate
24 that.
25 That question had to be looked at in the
315
1 broader context of a political dispute that had been
2 ongoing for -- for over a year prior to that.
3 THE COURT: Okay. Let me -- let me hold
4 for a moment, hear from Mr. Leuenberger and then on
5 this point, Mr. Smith.
6 MR. LEUENBERGER: Your Honor, I'd like
7 to make a -- I think was -- is an important point.
8 And that is through arguments to Judge Redman, the
9 plaintiffs' position was they had a different
10 Libertarian Party of Oregon than that associated with
11 Wes Wagner. And so what they're presenting was as an
12 interparty dispute.
13 Their Libertarian Party versus my
14 client's Libertarian Party. You eviscerated that
15 line of argument, and, essentially, told Mr. Smith if
16 he continued that, he would -- he would lose post
17 haste during the -- or in the course of that hearing
18 we had on summary judgment.
19 THE COURT: Well, I remember it, just
20 because it was so difficult. It was difficult enough
21 to have one party problem. If we suddenly had two --
22 okay.
23 MR. LEUENBERGER: That's right. But --
24 THE COURT: And you're saying that at
25 the stage of Redman, it was an interparty dispute?
316
1 MR. LEUENBERGER: That's the way it was
2 presented by the plaintiffs, Your Honor. They had
3 their Libertarian Party and they wanted to take over
4 and say that we couldn't be -- our people couldn't
5 Libertarian Party.
6 THE COURT: Mr. Smith?
7 MR. SMITH: Your Honor, to quickly
8 dismiss that, I think we can look at the pleadings.
9 I disagree with that. The pleadings, our complaint
10 never substantively changed. Our complaint never
11 substantively changed.
12 We make a couple of particular arguments
13 in there about the property that only -- out of these
14 two groups, only one can use the name. It has to be
15 one party. Our entire argument is there's one party.
16 There's one website. There's one group that has
17 access to the registered Libertarians.
18 THE COURT: You can see why I got so
19 upset with you when you said there were two parties.
20 MR. SMITH: Well, right. There has to
21 be, by law, by Oregon statutes, there is only
22 Libertarian Party of Oregon. Those have ownership of
23 the registered Libertarians, the use of those
24 Libertarians.
25 They have the party name. They have the
317
1 trademark. There's only one and that's -- so that's
2 not the case.
3 THE COURT: Okay. That's -- that's to
4 Mr. Leuenberger.
5 Now to Mr. Steringer.
6 MR. SMITH: To Mr. Steringer's point, I
7 would ask this Court, again, to look at the
8 documents, because there is not a single fact
9 argument. I looked for this, because he argued this
10 in his brief.
11 There's not a single fact argument in
12 his jurisdiction, judiciability argument in summary
13 judgment at all, let alone any that changed from his
14 motion to dismiss to his motion for summary judgment.
15 He says that there was a skinny record
16 and that facts were discovered and elucidated. No.
17 There are not any citations to exhibits. There are
18 not any citations of declarations in his
19 judiciability jurisdiction argument.
20 So it was -- and that's why I pointed
21 out very early on it was a question of law. Subject
22 matter jurisdiction's a question of law. It's not a
23 question of fact, where you incorporate a whole bunch
24 of facts to determine whether, you know, whether the
25 Court had jurisdiction.
318
1 When it's -- this question was presented
2 to yourself and to Judge Redman on the question of
3 law.
4 THE COURT: Well, now, wait, wait, wait,
5 wait, wait, wait, wait, wait.
6 A question of law verses a question of
7 fact doesn't mean that facts aren't important.
8 MR. SMITH: True.
9 THE COURT: Judges regularly have
10 questions of law to decide, but they have to have a
11 factual record.
12 MR. SMITH: Absolutely.
13 THE COURT: For example, in diversity
14 jurisdiction in the Federal Court, where is the
15 defendant incorporated? That -- there could be a
16 factual dispute about that about which there would be
17 a hearing.
18 MR. SMITH: And that --
19 THE COURT: The question of -- of
20 jurisdiction is -- is legal, but it may have an
21 underlying factual substrate that has to be settled.
22 Your point, if I understand it -- and then we'll have
23 to move on to our 11:30, I think, fairly soon -- is
24 that this wasn't carried out as a factual argument,
25 so the idea that Redman's actions don't matter
319
1 doesn't fly.
2 MR. SMITH: Correct. If it's a question
3 of law, it's the same question of law. Like I said,
4 there were not changes to facts. They didn't
5 incorporate discovery or exhibits or anything later
6 on.
7 THE COURT: It was -- I think what I'm
8 hearing you say -- correct me if I'm wrong -- is it
9 wasn't -- it was interparty dispute all along.
10 MR. SMITH: And it was the same question
11 of law that was answered.
12 THE COURT: Okay. It is 11:30 and we
13 need to move on to another hearing, so I'm going to
14 ask the patience of the 11:30 people just briefly and
15 let's take five minutes. You get three, you get two.
16 MR. SMITH: Okay. Your Honor, the first
17 thing I'll point out is even this Court's order, it
18 appeared to me, a fair reading of your order on this
19 is that you're exercising discretion.
20 And when the Court's exercising
21 discretion, you use words like, "Case law counsels
22 either cannot or should not, matter is either not
23 judicable or the Court has the power to exercise its
24 discretion," either/or language, again, supports
25 under the law our proposition there's no bright line
320
1 rule.
2 This is not something where we -- we
3 could have been a case of first impression. This
4 is -- this is a new area of law. There's not a lot
5 of developed case law on this question, on this
6 question that we're faced with factually.
7 THE COURT: Which question?
8 MR. SMITH: Can you enforce a political
9 party's bylaws? Are they enforceable? And I point
10 out -- I point that out, because as attorneys in
11 Oregon, we have the obligation to answer this
12 question, like you said. Should we be rectified?
13 I'm in the situation -- it's on the
14 record that I also represent the Republican Party of
15 Oregon as -- as general counsel. We have -- it's in
16 the press that there's a recall election for the
17 chair of the Republican Party.
18 For instance, if this is nonjudicable
19 and there's no way that a Court can enforce a party's
20 bylaws, if that chair gets recalled, they can simply
21 do what Mr. Wagner did and say, "I'm still the
22 chair," and there's nothing that anyone could do
23 about it. There's no remedy at law.
24 THE COURT: Well, I wouldn't -- well,
25 now, wait, wait, wait, wait. Nothing that anybody
321
1 can do and no remedy at law are two different
2 statements.
3 MR. SMITH: Well --
4 THE COURT: I mean, the whole --
5 MR. SMITH: -- and the Secretary of
6 State --
7 THE COURT: -- the whole message of my
8 ruling is Courts do some things and groups of people
9 do others.
10 MR. SMITH: Okay. The Secretary of
11 State said they wouldn't do anything. The larger
12 political party couldn't do anything, so --
13 THE COURT: Right. You know, it's the
14 old phrase, you've made your bed. Now lie in it.
15 MR. SMITH: And you had -- you had said
16 early on in our first oral argument that you saw this
17 case going to the Supreme Court. To me, a clear
18 indication that you see this as a close call, if you
19 will. Reasonable minds. You may not remember that,
20 but I remember that you had said that.
21 THE COURT: Which Supreme Court?
22 MR. SMITH: You didn't distinguish.
23 THE COURT: No, I'm not -- I'm not being
24 facetious here.
25 MR. SMITH: I'm not sure you
322
1 distinguished, Your Honor. But enter next year is
2 again, as to Mr. Grover's concerns, we specifically
3 asked this Court to determine what happens with the
4 party funds. Who's got control of the party assets?
5 Paragraph 7 of our complaint talks about
6 who's got control of the money. Paragraph 38, who's
7 got custody and control of the assets? Who's got the
8 right to use the name? Who's got the right to the
9 website?
10 Our Prayer No. 5 specifically asks this
11 Court to rule on -- to tell them to turn over the
12 possession and control of the LPO property, the
13 website, the -- to tell the Secretary of State to
14 release those lists of names to us.
15 And that gets right into, as you
16 analyzed, the religious liberties cases. The -- the
17 Supreme Court of the United States and even the
18 Oregon Court of Appeals has pointed out the First
19 Amendment does not have an absolute bar on Courts
20 getting in using neutral principles, such as bylaws,
21 Robert's Rules of Order to determine disputes.
22 We're not asking this Court to make any
23 sort of a political decision. We never did. And for
24 that -- that reason, we think the jurisdiction should
25 be reversed. We're not asking the Court to do
323
1 anything political: Just interpret the documents and
2 then apply the facts that took place afterwards to
3 see, you know, who was right and who was wrong. And
4 so that -- that is not barred.
5 If that's barred by jurisdiction, we
6 have all kinds of problems. If an officer of a
7 political party can't be held accountable for
8 breaching fiduciary duty, they can abscond with
9 money. They can do anything may want and there's no
10 remedy at law. If -- if this --
11 THE COURT: Now -- now you're going way
12 too far.
13 MR. SMITH: Okay. Maybe you disagree.
14 I think --
15 THE COURT: I mean, come on. Come on.
16 Come on. Come on.
17 MR. SMITH: And as an objectively
18 reasonable attorney --
19 THE COURT: Come on. Come on. Come on.
20 Come on. Come on.
21 MR. SMITH: How can a --
22 THE COURT: You know you're going way
23 too far.
24 MR. SMITH: I have -- I have the job of
25 advising the Republican Party this coming weekend.
324
1 What happens if the chair gets recalled?
2 THE COURT: But that's a lot different
3 from a conversion claim by an organization against an
4 individual in tort.
5 MR. SMITH: ORS 248.004 says, "Political
6 parties are nonprofits for purpose of tort, contract
7 and other liabilities." That's a statutory
8 requirement. So it's -- it's -- the question is
9 there.
10 THE COURT: You know, you were doing
11 pretty well.
12 MR. SMITH: I think the questions --
13 THE COURT: You have a tendency, though,
14 to go out way over the edge and then it causes the
15 board to flip back and hit you in the forehead,
16 really.
17 MR. SMITH: Your Honor --
18 THE COURT: I mean, the fact -- look,
19 if -- the fact that a political party is roaming
20 around somewhere doesn't insulate everybody from tort
21 claims or -- I mean, if -- if a member of a political
22 party breaks in to the organization's headquarters at
23 night, it's not going to be a defense that, "Well, it
24 was a political party. No other -- no other laws
25 apply."
325
1 This was -- well, it was an -- there
2 were two groups, each of which claimed they were the
3 rightful Libertarian Party of Oregon.
4 MR. SMITH: Mm-hmm.
5 THE COURT: And guess what? There's a
6 group of folks out there in society who can determine
7 that. They're called Libertarians.
8 MR. SMITH: Your Honor, I don't want to
9 take --
10 THE COURT: Okay.
11 MR. SMITH: But -- so, again, to factual
12 support. We talked legal and factual support. We've
13 talked about some of the factual support. There's
14 other factual support. We had four decisions from
15 the national organizations.
16 We have the LNC, we have the convention,
17 we have the executive committee that were ignored by
18 Mr. Wagner. So what that (indiscernible) Cousins v.
19 Wigoda, the reason the Court abstained in Cousins v.
20 Wigoda, in those cases, is because there was a
21 different body that could resolve it. They were
22 convention delegation questions.
23 In this case, that's not available,
24 because that did happen. The plaintiffs won with a
25 national organization. We -- my clients were seated
326
1 at the national organization. But that didn't
2 resolve the state law issues, the state law conflict.
3 THE COURT: Mr. Steringer, on that?
4 MR. STERINGER: We haven't had an
5 opportunity to get into this battle. The -- the
6 National Libertarian Party has nothing to say about
7 the -- the true leadership of the Libertarian Party
8 of Oregon except to the extent it impacts what they
9 do as a national party.
10 They can decide who to recognize or not,
11 but the Libertarian Party of Oregon is a -- is a
12 state organization that happens to charter with a
13 national organization and is not bound by what that
14 national organization says about the identity of it's
15 leadership.
16 THE COURT: Okay. I'm going to take
17 this under advisement. I have your submissions.
18 I've benefited from this argument. I will get you a
19 decision in due course, probably a week or so. Is
20 there anything brewing out there that makes a week or
21 10 days untimely other than your need to advise
22 others? It's why you get paid the big bucks.
23 MR. SMITH: Right.
24 THE COURT: Take those -- no. I'm --
25 I'm -- I'm being facetious. It is difficult if you
327
1 have to make decisions on behalf of Client B when
2 you're not quite sure what happened to Client A.
3 All right. Thank you all.
4 MR. STERINGER: Thank you.
5 * * *
6
7 (Conclusion of proceedings, Volume 5,
8 8-1-13 at 11:41 a.m.)
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Reporter's Certificate 328
1 REPORTER'S CERTIFICATE
2 I, Katie Bradford, Court Reporter of the
3 Circuit Court of the State of Oregon, Fifth Judicial
4 District, certify that I transcribed in stenotype
5 from a CD the oral proceedings had upon the hearing
6 of the above-entitled cause before HENRY C.
7 BREITHAUPT, Circuit Judge, on August 1, 2013;
8 That I have subsequently caused my
9 stenotype notes, so taken, to be reduced to
10 computer-aided transcription under my direction; and
11 that the foregoing transcript, Volume 5 of 5,
12 Pages 270 through 327, both inclusive, constitutes a
13 full, true and accurate record of said proceedings
14 taken from a CD and so reported by me in stenotype as
15 aforesaid.
16 Witness my hand and CSR Seal at
17 Portland, Oregon, this 10th day of March, 2014.
18
19
20 ___________________________
Katie Bradford, CSR 90-0148
21 Court Reporter
(503) 267-5112
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