Co-op court documents

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MARGARET (MAGGIE) COULTER and ROBIN KRISTUFEK, v. BOARD OF DIRECTORS OF

SACRAMENTO NATURAL FOODS COOPERATIVE, Case No. 2011-80000903:

The following shall constitute the Court's tentative ruling on petitioners ex parte application for

alternative writ of mandate and order to show cause, which is set for hearing in Department 19 on Friday,

July 29, 2011. The tentative ruling shall become the final ruling of the Court unless a party wishing to be

heard so advises the clerk of this Department no later than 4:00 p.m. on the court day preceding thehearing, and further advises the clerk that such party has notified the other side of its intention to appear.

In the event that a hearing is requested, oral argument shall be limited to no more than 20 minutes

per side.

In the event that this tentative ruling becomes the final ruling of the Court, the ruling will be

confirmed by minute order and no further written order shall be required.

This is a petition for writ of mandate under Code of Civil Procedure section 1085 in which the

petitioners, who are members of the Sacramento Natural Foods Cooperative, seek issuance of a writ of

mandate that would require respondent Board of Directors of the Cooperative to place two initiative

measures on the ballot for a vote of the members of the Cooperative at the next election, and to providethem with equal time to campaign for the measures.

One of the initiative measures, proposed by petitioner Coulter, is entitled the Human Rights

Initiative, and seeks to prevent respondent from ordering and selling any products (a) made by Israeli-

owned companies, (b) produced in Israel or in any of Israels illegal settlements or (c) made with

agricultural products or raw materials from Israel or its illegal settlements. (See, Petition for Writ of

Mandate, Exhibit C.)

The petition alleges that petitioner Coulter proposed this initiative at the Board meeting held on

February 1, 2011, and that she also submitted more than the required number of signatures to put an

initiative measure on the ballot under Section 10.06(a)(1) of respondents bylaws. The petition further

alleges that respondent Board passed a motion at a subsequent meeting on April 5, 2011 declining tocertify the initiative for the ballot. A copy of the Boards resolution to that effect is attached to the

petition as Exhibit F, and states:

Whereas, the Board of Directors of Sacramento Natural Foods Cooperative has received and

reviewed a copy of a petition entitled Human Rights Initiative which calls for the cooperative to boycottproducts made by Israeli owned companies and products produced in Israel and products made from

agricultural products or raw materials from Israel; and Whereas, the Board of Directors has reviewed its

Articles of Incorporation with legal counsel and does not find that there is any connection between a

boycott of Israeli products and the purposes set forth in the Articles of Incorporation, Now be it resolved

that the acts called for in the petition fall outside the specific purposes of the cooperative as set forth inthe Articles of Incorporation and the Board, therefore, respectfully declines to certify this petition as a

ballot measure and to perform the acts requested.

The other initiative measure, which petitioners submitted to respondent Board on April 13, 2011

(also with more than the required number of signatures), is entitled the Restore Co-Op Democracy

Initiative. The summary of the initiative states that it is [i]n response to actions by the Co-op Board of

Directors since September 2010 that have prevented Owner/Member democratic participation in the Co-

op and usurped Member control; among the operational provisions of the initiative is one that [r]estores

Members right to place initiatives and referendums on the ballot as provided by Section 10.06 of the

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Bylaws; revokes actions taken by the Board that deny this right. (See, Petition for Writ of Mandate,

Exhibit G.)

The petition alleges that respondent Board passed a resolution on June 7, 2011 declining to certify

this initiative for the ballot due to conflicts with bylaws and California law. (See, Petition for Writ of

Mandate, Exhibit K.)

The petition for writ of mandate was filed on June 30, 2011. It states two causes of action under

Code of Civil Procedure section 1085. The first alleges that respondent Board violated a non-

discretionary ministerial duty to place the two initiative measures on the ballot. The second cause of

action alleges that respondent Board violated a separate non-discretionary, ministerial duty to treat

campaigns in an even-handed manner by placing material that opposes petitioners proposed initiatives

on the Co-op website, by e-mailing campaign material to the Co-op listserve as well as selected members,

and by using Co-op funds to send a letter to members opposing the proposed initiatives.

The petition seeks issuance of a writ that will require respondent Board to place the two proposed

initiative measures on the next ballot, which is scheduled to be mailed to the members on August 20,

2011. The petition also seeks issuance of a writ to redress the violations alleged in the second cause of

action including but not limited to allowing Petitioners space on the Co-op website that is equal to thespace used by Respondents campaign, and allowing Petitioners access to mail active members and to

email the Co-op listserve. (See, Petition for Writ of Mandate, p. 11:14-17.)

Petitioners now seek issuance of an alternative writ of mandate on an ex parte basis. Petitioners

Notice of Ex Parte Application also states that petitioners are seeking a stay order: Finally, if this matter

cannot be heard in sufficient time to allow Petitioners to effectively campaign for the Initiatives,

Petitioners request that the Court stay the printing and mailing of the ballots for at least three months.

(See, Notice of Ex Parte Application, p. 2:26-3:1.) In the proposed order they have submitted to the Court

as part of the application, petitioners include a provision staying the printing and mailing of the ballots

until no earlier than November 20, 2011. (See, Proposed Order, p. 2:19-20.)

Respondent has filed an opposition to petitioners application.

As explained in the Courts Guide to the Procedures for Prosecuting Prerogative Writs, which

have been published in accordance with Local Rule 2.01(E), an application for issuance of an alternative

writ functions as a means of setting a writ petition for a hearing on the merits. As stated on page 8 of the

Guide: the alternative writ does not, in and of itself, accomplish a stay or afford any affirmativerelief. As stated on page 7 of the Guide, an application for issuance of an alternative writ may be used to

expedite the date of the hearing on the merits and shorten the normal briefing schedule applicable to writ

of mandate cases (which, under Local Rule 2.01(D), requires opening briefs to be filed no later than 45

days prior to the hearing, and opposing briefs no later than 25 days prior to the hearing), where the

application sets forth circumstances warranting an expedited hearing.

In this case, petitioners application, briefing, and supporting declarations focus largely onarguing the ultimate merits of the case and give little attention to setting forth circumstances that would

warrant an expedited hearing. In fact, petitioners do not even request or suggest a particular date for the

hearing on the merits of the petition. However, because petitioners do highlight the fact that the ballots

for the next regularly-scheduled election are to be mailed on August 20, 2011, their application may be

deemed to be a request to set an expedited hearing and shortened briefing schedule that would permit this

matter to be heard on the merits prior to that date.

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Petitioners ex parte request for an order staying the printing and mailing of the ballots for at least

three months is, in effect, an application for issuance of a temporary restraining order without notice to

the respondent. Under Code of Civil Procedure section 527(c)(1), no such order may be granted unless

[i]t appears from facts shown by affidavit or by the verified complaint that great or irreparable injury

will result to the applicant before the matter can be heard on notice.

Petitioners application for an expedited hearing and briefing schedule and their application for atemporary restraining order are two related aspects of what is, in essence, a single request: that the Court

structure proceedings in this case so that a decision on the merits of the petition may be rendered before

the date the ballots for the next election are printed and mailed, in order to permit petitioners to campaign

effectively for the initiatives if they prevail on the merits. Viewing petitioners application in this light,

the Court concludes that both aspects of their request should be analyzed under the standard applicable to

the issuance of temporary restraining orders. As applicable to this case, that standard is whether great or

irreparable injury will result to the petitioners if this matter is scheduled and heard according to the

normal procedures and filing schedules applicable to petitions for writs of mandate, without any stay of

the printing and mailing of ballots.

Having reviewed the briefs, the declarations and the documentary exhibits submitted by the

parties, the Court concludes that petitioners will not suffer great or irreparable injury if the application forthe alternative writ and the stay are denied, and the matter is heard according to regular writ procedures.

This conclusion is based on the following factors:

1. Respondent conducts regular, yearly elections. (See, Bylaws, Section 9.05; RespondentsElection Code, page 2.) Therefore, if the proposed initiatives do not appear on this years

ballot, but petitioners ultimately prevail on the merits, the proposed initiatives may appear on

next years ballot. In addition, the Election Code provides for the possibility of Special or

Emergency Elections. Thus, petitioners will not be deprived of the opportunity to submit

their proposed initiative measures for a vote of the Co-op Membership if they ultimately

prevail on the merits. A hearing scheduled according to the Courts normal writ procedures

will not result in extreme or unreasonable delay; without any question, a hearing may be

scheduled well in advance of next years ballot mailing date.

2. The subject matter of the proposed initiatives does not appear to affect the financial orpersonal affairs of the petitioners directly or substantially in any manner, such that a delay in

having the proposed initiatives appear on the ballot, should petitioners ultimately prevail on

the merits, would lead to any significant adverse consequences to them.

3. The proposed initiatives do not appear to have any significant impact on the businessoperations of the Co-op (and thus on petitioners economic interests as members) such that

any delay in having the proposed initiative measures appear on the ballot would cause any

damage to such operations. The Court notes in connection with this point that respondent hassubmitted a declaration estimating that the Human Rights Initiative would affect only a

handful of non-food products that comprise far less than one-tenth of one percent of the Co-ops total annual sales. (See, Declaration of Paul S. Cultrera, paragraph 12.)

4. Any injury to the strictly political interests of petitioners caused by a delay in putting theproposed initiative measures on the ballot is not significant and would be remedied fully by

an order placing the matters on the ballot if they ultimately prevail on the merits. Given the

limited number of products involved, the practical effect of delaying a vote on the matters

appears to be insignificant.

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5. Any injury to the strictly political interests of petitioners caused by a delay in adjudicatingtheir claims regarding even handed campaign procedures is neither significant nor

irreparable. Notwithstanding efforts respondent Board may make, or have made, to persuade

members that the proposed initiatives are outside the purposes of the Co-op and should be

rejected, petitioners retain their free speech rights and their ability to use other methods of

communication to advance a contrary message. If the Court ultimately concludes that

petitioners were entitled to equal time in the use of the Co-ops means of communication,as they allege, an order enforcing that right for the next election campaign will provide an

adequate remedy.

In addition, the Court notes that respondents opposition raises significant issues that suggest the

petitioners are ultimately not likely to prevail on the merits of at least part of their claims.

For example, in addition to arguing that the Co-op bylaws explicitly permitted the Board to

decline to certify the initiatives for the ballot, respondent contends that it was justified in doing so,

particularly with regard to the Human Rights Initiative, out of legitimate concerns that engaging in a

boycott of Israeli products would place the Co-op in jeopardy of violating federal law that prohibits

agreements to refuse or actual refusal to do business with Israel.

Respondent also contends that binding appellate authority holds that the Court should decline to

exercise jurisdiction in cases involving disputes over the internal rules of private voluntary

organizations, such as the present case, unless the challenged action plainly contravenes the associations

bylaws (which respondent asserts is not the case here), and the interest in protecting the aggrieved

partys rights outweighs the infringement on the organizations autonomy and the burdens on the courts

that will result from judicial attempts to settle such internal disputes. (See, California Trial LawyersAssociation v. Superior Court(1986) 187 Cal. App. 3rd 575, 579.)

The latter issue in particular is one the Court believes should be briefed fully by both parties and

determined prior to a hearing on the merits of the petition, in order to promote the interests of justice and

judicial economy.

As set forth above, the Court concludes that the circumstances of this case do not warrant an

expedited hearing on the merits, because petitioners will not suffer irreparable injury if the hearing is

heard according to the Courts normal procedures. Petitioners application for issuance of an alternative

writ of mandate, which is deemed to be a request for an expedited briefing and hearing schedule, is

therefore denied. Petitioners request for a stay (temporary restraining order) regarding the printing andmailing of ballots for the next election, is also denied on the ground that they have not demonstrated that

they will suffer irreparable injury if the matter is heard on regular notice.

Counsel for the parties are directed to meet and confer and contact the Clerk of this Department

regarding available dates for further proceedings in this matter.

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