[Kzyxtalk] KZYX Inspection, Philo Oct 7 at 1pm

[King Collins]

Oct 2, 2015

Dear Mr. Campbell and Ms. Courtney:

Thank you for your email of September 5 concerning our demand for inspection of documents.  In it, you state that your current position concerning the inspection is the same as your initial response of June 23, wherein you asserted that you could delay the inspection until you had hired a general manager and that our rights of inspection were more restricted than we claimed.

Please refer to our response of June 26, copied below.  In it, we explained how your restrictions have no basis in the law.  As for a delay, the organization has had plenty of time to prepare for the inspection, a total of four months by the time it happens.  You have not identified any specific record that cannot be made available for inspection by October 7.

We intend to proceed with the inspection on October 7, beginning at 1:00pm, at the Philo office.  It is not clear from your letter that you intend to refuse access at that time.  Pursuant to the Corporations Code, you would need a court order to do so.  Otherwise you will be in violation of California law, our own bylaws, and your duty to comply with both.

We thank you in advance for facilitating the inspection on October 7.

Doug McKenty
John Sakowicz
King Collins
Norm de Valle
Peter Kafin

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June 26, 2015

Mr. Campbell:

Thank you for your email of June 23, 2015, responding to our written demand of June 9 for the inspection of documents.  We disagree with your analysis.

1.  The right of a member to inspect and copy records is not based solely on California Corporations Code Section 6330, which authorizes the inspection of membership records.  There is also Section 6333, which states:

"6333.  The accounting books and records and minutes of proceedings of the members and the board and committees of the board shall be open to inspection upon the written demand on the corporation of any member at any reasonable time, for a purpose reasonably related to such person's interests as a member."

In addition, the Bylaws of Mendocino County Public Broadcasting grant members the right to inspect any records that are not personnel records or otherwise protected by law:

"Member Inspection Rights:
Members shall have the right at all reasonable times to inspect all of MCPB’s records which are or should be maintained at the principal office except personnel records and other items that would violate the privacy of a specific individual or are otherwise protected under Federal or California law."

Thus the members' right to inspect does indeed extend to the categories of documents enumerated in the demand.

Please note that the Board of Directors does not have the power to amend the Bylaws to diminish any rights granted to members.  Only a vote of the membership can do that.  If you wish to oppose the demand, Corporations Code Section 6331 requires you to file a petition in Mendocino County Superior Court.  Under Section 6336, any director or officer who does not comply with the demand can be punished for contempt of court.  Under Section 6337, the organization can be held liable for members' reasonable costs and expenses, including attorneys' fees, in connection with any related legal proceedings.

2.  Thank you for acknowledging a director's absolute right to inspect any document under Corporations Code Section 6334.  Because the volume of documents may be too great for any one person to inspect, Mr. Sakowicz may be accompanied by an agent or attorney to assist him.  Since any given record will be inspected by the director or his attorney/agent, he will be in compliance with Section 6311 regarding such assistance.  Further, any non-disclosure agreement must be limited to records that cannot otherwise be inspected by members, i.e., "personnel records and other items that would violate the privacy of a specific individual or are otherwise protected under Federal or California law."  The Code does not require anyone to sign a blanket non-disclosure agreement as a condition for inspecting records, nor will they.

3.  Your objection concerning a need to create records is misplaced.  As stated in the Demand Letter:

"Please also note that a failure to present any of the requested items does not relieve you of the duty to make any and all of the other requested items available for inspection and/or copying.  We are not asking you to create any summaries.  But we do want access to all of the documents that are related to the above list, including any existing summaries, as part of the inspection of all records from 2007 to the date of inspection."

See also #6 below concerning your request for a delay.

4.  To the extent you have already produced specific documents to Mr. Sakowicz in response to a prior demand, you do not need to provide duplicates.  This exception does not apply if any member has demanded the same information.

5.  The alternatives you have offered to Messrs. Collins and O'Brien concerning their prior demands to inspect the membership rolls are unreasonable and too expensive.  They are based on an incorrect reading of a statute that bars releasing such information to third parties.  Members are not third parties.  In any event, prior efforts and negotiations are not a waiver of a member's right to inspect.

The efforts of Messrs. Sakowicz, Collins, and O'Brien to try to resolve the current crisis at MCPB/KZYX through negotiation with the board and discussion with the membership are not signs of bad faith but rather an attempt to avoid litigation.  Do not confuse patience and reason with weakness and ill-will.

6.  We see no need at this time to delay the inspection.  As noted above, the failure to have all records available by July 11 does not relieve you of the duty to allow inspection of those records that are available at that time.  If for any reason certain records are not available that the director or members believe are essential, then arrangements can be made to inspect them at a later time.  Asking us to wait until four weeks after some unspecified date is too uncertain.  However, we will consider a later date once the full board has met and considered this reply.

7.  As noted above, you do not need to produce the same documents to Mr. Sakowicz twice.  But the Demand Letter is more comprehensive and includes demands for inspection by members, demands which stand alone.  There is no "condition precedent" that must be met before MCPB complies with the current demand.

8.  Because Mr. Sakowicz has an absolute right of inspection as a director, his intentions are not an issue.  The only time intent is an issue is if you believe that the members' demand for access to membership information under Sections 6330 is for reasons not related to their interests as members.  If you believe so, then your remedy, as noted above, is to file a petition with the Superior Court to have that particular demand set aside.  But the members do have a legitimate reason for their demand, as stated in the Demand Letter:

"The purpose of the demand by the members is to review all financial transactions and data, and all membership and voting records and data, from the year prior to the employment of the current general manager, Mr. John Coate, up to and including the date of inspection, as there has been inadequate oversight by the board of directors concerning finances, memberships, and elections during his tenure.  The membership has a legitimate interest in the financial affairs of the corporation  and the integrity of the voting rolls and election process."

9.  Thank you for your willingness to consider the proposals set forth by Mr. O'Brien, one of the Demand Letter signers.  If you adopt those specific proposals before July 10, he will drop his demand for inspection of the membership rolls, and will encourage the other signers to do likewise.  However, this will have no effect on the demand to inspect and possibly copy all other records, including financial.  Mr. O'Brien looks forward to working with the new Committee on Bylaws and Policies.  MCPB policies authorize the Board of Directors to name volunteer members to board committees.  The Board should consider naming some of the signers to certain committees - e.g., Mr. McKenty to the Finance Committee - as a way of engaging with the membership, promoting transparency of governance, and avoiding the need for future inspection demands.

Thank you again for you detailed response.  Please make sure that the full board has time to consider this reply before it meets next Monday.  We hope that the full board will acknowledge our right of inspection and take positive steps to address the underlying concerns.  If it does, we will consider a delay.  If not, then we will be at the main office on July 11 to proceed with the inspection.  Please do not remove any records or take any other action that might hinder the process.

Sincerely,

John Sakowicz
Doug McKenty
King Collins
Norm de Valle
Dennis O'Brien

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