Before the
AMERICAN ARBITRATION ASSOCIATION
Los Angeles, California
In the Matter of the Arbitration between:
CALIFORNIA YOUNG REPUBLICANS, INCORPORATED
Claimant,
–versus–
JENNIFFER RODRIGUEZ and
ROHIT JOY
Respondents,
CALIFORNIA YOUNG REPUBLICANS’
STATEMENT OF CLAIM
INTRODUCTION
This is a dispute over the governance of California Young Republicans, Incorporated (“California Young Republicans” or “CYRs”). It arises out of an attempted hostile takeover of the California Young Republicans by certain former officers of the CYRs and individuals associated with a rival organization known as the Young Republican Federation of California (the “YRFC” or “Federation”).
Unbeknownst to the vast majority of the officers and members of the California Young Republicans, in the summer of 2009 Respondents Jenniffer Rodriguez and Rohit Joy (who were then the CYR Chairman and Secretary, respectively) embarked on an audacious scheme to seize complete control of the organization and to cause it to merge with the rival YRFC. At first, their plan “to win and successfully merge the two [California] groups” involved “gain[ing] control of all of CYRs local clubs.” Exhibit A, 8/13/09 Rodriguez email. This included efforts to put loyal friends in control of existing local clubs, as well as to charter a number of new clubs that would be loyal to them.
In the fall of 2009, the Respondents’ plans began to unravel. Respondents lacked control of the Board of Directors and a larger body known as the State Committee. To gain more power in the State Committee, they needed time to navigate the somewhat elaborate process of chartering new clubs. But time is what they lacked, as they faced a requirement in the CYR Bylaws that an Annual Convention be held each year and that the election of officers take place at the Annual Convention in each odd numbered year. In September of 2009, it all came to a head when a majority of the elected officers noticed a special meeting of the State Committee for November 2, 2009 for the purpose of scheduling the Annual Convention and election of officers.
Fearing that they would be removed from office and desperate to see their takeover plan through, Respondents Rodriguez and Joy resorted to brazen misconduct. Putting their own ambitions over the best interests of the corporation, they repeatedly violated the CYR Bylaws and engaged in numerous breaches of their fiduciary obligations to the corporation.
Using procedural gamesmanship, Respondents attempted to preclude duly-elected officers from voting on the State Committee. They also tried to deny votes to several chapters in good standing.
In the end, despite the Respondents’ subterfuge, the State Committee held a valid meeting on November 2, 2009, at which it scheduled the Annual Convention and election of officers for December 5, 2009. On December 5, 2009, the Annual Convention was held and a new group of officers was elected.
Unwilling to accept defeat, and driven by narcissism and blind ambition, Respondents refused to recognize the results of the December 5, 2009 election. Instead, they continued to wrongfully hold themselves out as the Chair and Secretary of the California Young Republicans.
Then, in February 2010, they held an illegitimate convention of their own, at which they purported to elect a different slate of officers (including themselves and prominent members of the YRFC), amend the CYR Bylaws to facilitate a merger with the YRFC, and hand out endorsements to political candidates favored by the YRFC.
As a result of Respondents’ misconduct, there are now two different groups of individuals who claim to be the elected officers of the corporation. There are also now two different websites and growing confusion with respect to the very identity of the corporation. Additionally, there are now prominent Republican candidates associated with Respondents who are using invalid alleged “endorsements” from the California Young Republicans for their political advantage.
This dispute is causing grave and irreparable injury to the California Young Republicans. To make matters worse, it is occurring during an important election cycle and thus threatens to frustrate the CYRs’ core mission. Accordingly, the California Young Republicans have commenced this arbitration and request that it be expedited.
DETAILED STATEMENT OF CLAIM
I. Background to the Dispute
A. California Young Republicans, Inc.
California Young Republicans, Incorporated (“California Young Republicans” or the “CYRs”) is a California non-profit corporation. Its primary objective, as stated in its bylaws, is “to involve young people in Republican Party politics.” Exhibit C, Bylaws of California Young Republicans, Inc., Art. I, § C, at p. 5 (“CYR Bylaws”). Its official website can be found at www.cyr.org.
The California Young Republicans is a mainstream organization of Californians between the ages of 18 and 40 who identify themselves as Republicans. The CYRs are an inclusive organization that does not seek to promote any particular faction within the Republican Party.
Over its long history, the California Young Republicans have enjoyed an excellent reputation and strong name recognition. Numerous elected officials and party officers consider themselves to be “alumni” of the California Young Republicans.
The California Young Republicans is a permanently-chartered volunteer organization affiliated with the California Republican Party. Exhibit B, Standing Rules and Bylaws of the California Republican Party, §3.01(D)(2), at p. 43 (“State GOP Bylaws”). In addition, California Young Republicans is the only California organization chartered by the Young Republican National Federation (“YRNF”), the oldest political youth organization in the United States. NOTE 1
Because of its good name, reputation, history, and status as the only Republican youth organization in California recognized by both the California Republican Party and the Young Republican National Federation, the California Young Republicans have been the target of hostile takeover attempts by a rival organization known as the Young Republican Federation of California (the “Federation” or “YRFC”). The YRFC was formed by former CYR members in 1993 following a contentious annual convention and disputed election of officers. Ever since then, its leadership has coveted the California Young Republicans’ name recognition and status as the sole California affiliate of the Young Republican National Federation.
B. Pertinent Provisions of the CYR Bylaws
As a California non-profit corporation, California Young Republicans is governed in accordance with California law and the corporation’s bylaws. As explained in detail below, the California Young Republicans is governed by three decision-making bodies: the Board of Directors, the State Committee, and the Annual Convention. Under this state-wide leadership, the members of the CYRs can participate as members of chartered regional clubs (typically from a county or group of counties within the state) or as at-large members.
1. State Officers and Board of Directors
Under the CYR Bylaws, the statewide Officers of the organization are a State Chairman, an Executive Vice-Chairman, an Administrative Vice-Chairman, a Secretary, a Treasurer, a National Committeeman, a National Committeewoman, three Regional Vice-Presidents (one for each of the North, Central and South regions of the state), a Finance Director, and Communications Director. Exhibit C, CYR Bylaws, Art. V, § A at p.13.
The five principal Officers, specifically the State Chairman, the Executive Vice-Chairman, the Administrative Vice-Chairman, the Secretary and the Treasurer, constitute the Board of Directors. Id. at Art. VIII, § B at p.17. Except to the extent certain matters are reserved to the State Committee or Annual Convention, the affairs of the California Young Republicans are managed by the Board of Directors. Id. at Art. VIII, § A at p. 17.
Under the CYR Bylaws, the Principal State Officers (and hence Directors) are required to be elected at the Annual Convention in odd numbered years for two-year terms ending at the adjournment of the Annual Convention in the next odd numbered year. Likewise, the National Committee Members and other elected state officers are to be elected in odd numbered years, while the three Regional Vice Presidents are elected at the Annual Convention in even numbered years. Specifically, the CYR Bylaws provide:
A. Election and Term of Office
1. Principal State Officers
The State Chairman, Executive Vice-Chairman, Administrative Vice-Chairman, Secretary, and the Treasurer shall be elected at the Annual Convention held in odd numbered years to hold office until the adjournment of the next odd numbered year’s Annual Convention.
2. Regional Officers
The 3 Regional Vice-Presidents shall be elected at the Annual Convention held in even numbered years to hold office until the adjournment of the next even numbered year’s Annual Convention.
3. National Committee Members
The National Committeewoman and National Committeeman shall be elected at the Annual Convention held in odd numbered years to hold office until adjournment of the next numbered year’s Annual Convention after the adoption of this section.
4. Other Elected State Officer
The Finance Director and Communication Committeeman shall be elected at the Annual Convention held in odd numbered years to hold office until the adjournment of the next odd numbered year’s Annual Convention. Exhibit C, CYR Bylaws, Art. V, § B at p. 13-14 (emphasis added).
2. The State Committee
Under the CYR Bylaws, certain powers are vested in the “State Committee.” Exhibit C, CYR Bylaws, Art. IX. The members of the State Committee are the elected officers (described above), plus a representative of each of the chartered clubs in good standing and certain ex officio members. Id. at Art. IX, § B, at p. 18.
The CYR Bylaws provide that “[t]he State Committee shall have all the power of the members except for such powers as are specifically reserved to the Annual Convention or to the members, and such other rights and powers as are given them under these bylaws.” Exhibit C, CYR Bylaws, Art. IX § A at p. 17-18. The powers of the State Committee specifically include the authority to “exercise general control over all the officers and committees of the CYRs.” Id. Another important power of the State Committee highly relevant to this dispute is the power to select the date and place of the Annual Convention. Id. Art. VIII, § C.1.
The CYR Bylaws require the State Committee to hold regular meetings at least once per quarter. Exhibit C, CYR Bylaws, Art. XIII, § D at p. 18. In addition, the CYR Bylaws provide that “Special meetings of the State Committee may be called by the State Chairman or by written request of 1/3 of the voting members of the State Committee eligible to vote as of the last meeting of the State Committee” on at least 30 days written notice setting forth the business to be transacted. Id. at Art. XIII, § E at p. 18.
3. The Annual Convention
Under the CYR Bylaws, an Annual Convention is to be held each year. Exhibit C, CYRBylaws, Art. VIII at p. 21-23. The Annual Convention is to be held “on a date and place selected by the State Committee.” Id. at Art. VIII, § C.1 at p. 22.
As noted above, the Principal State Officers and certain other officers are required to be elected for 2-year terms at the Annual Convention in odd-numbered years, while the three Regional Vice Presidents are to be elected at the Annual Convention in even numbered years. Id., Art. V, § B at p. 13-14.
II. Specific Events Giving Rise to the Controversy at Issue
A. In Violation of the CYR Bylaws and Her Fiduciary Duties, Jenniffer Rodriguez Attempts to Forestall the 2009 Annual Convention Mandated by CYR Bylaws
In 2008, Jenniffer Rodriguez became State Chairman due to the resignation of the elected State Chairman Catherine Brinkman. In accordance with CYR Bylaws, Ms. Rodriguez’s term was to expire at the adjournment of the 2009 Annual Convention. Exhibit C, CYR Bylaws, Art. V, § B.1 at p. 13. Because the Annual Convention each year is to take place in the Winter Quarter, which is defined as January-March of that year (unless waived by a 2/3 vote of the State Committee), Ms. Rodriguez’s term was to expire in the first quarter of 2009. Id., Art. VIII, § C.1 at p. 22.
Notwithstanding the requirement of holding an Annual Convention each year to elect officers under the CYR Bylaws, it became increasingly apparent as 2009 unfolded that Jenniffer Rodriguez had no intention of calling an Annual Convention. In 2009, Respondent Rodriguez’s behavior also became increasingly peculiar and erratic. NOTE 2
As a result of concerns that Respondent Rodriguez was attempting to delay or avoid the calling of an Annual Convention as required by CYR Bylaws, on September 29, 2009, then-Treasurer Andy Stanley sent an email to the members of the State Committee noticing a special telephonic meeting of the State Committee pursuant to Article IX, Section E of the CYR Bylaws.
One of the principal items of business set forth in the notice was “[s]etting a date, time and location for the CYR annual convention for the election of officers as required in Article V, Section B, parts 1, 3 and 4.”
As set forth in the notice, the meeting was properly requested by more than 1/3 of the members of the State Committee, specifically Executive Vice Chairman Amanda Richardson, Administrative Vice Chairman Bryan Williams, Treasurer Andy Stanley, National Committeeman Zack Scrivner, National Committeewoman Courtney Mayo and Northern Regional Vice President Roger Eagleton. NOTE 3 Exhibit D, 9/29/2009 Notice of Special Meeting of State Committee. The meeting was noticed for Nov. 2, 2009, providing more than the required 30-days notice. Id.
In an effort to preempt the November 2, 2009 meeting noticed by members of the State Committee, Jenniffer Rodriguez attempted to notice an earlier meeting of the State Committee. On October 2, 2009 at 10:52 p.m., then-Secretary Rohit Joy emailed the members of the State Committee to inform them that Jenniffer Rodriguez was noticing a telephonic Special Meeting of the State Committee to be held on Sunday, November 1st, 2009 at 8:00 p.m. NOTE 4 Exhibit E, 10/02/09 Notice of Special Meeting of State Committee on 11/01/2009. This meeting was scheduled to take place just one day before the meeting already noticed by the majority of members of the State Committee.
Like the notice previously issued by six of the State Officers for a November 2 meeting, the notice of the November 1 meeting called by Ms. Rodriguez also included as an item of business the setting of the time and place for the Annual Convention. Id. It also included as an agenda item the recognition of a number of new CYR Chapters that Ms. Rodriguez had hastily and improperly organized in an attempt to pack the next Annual Convention with supporters for her impending candidacy for State Chairman and a variety of other matters discussed below. Id.
B. In Violation of the CYR Bylaws and Her Fiduciary Duties, Respondent Rodriguez Holds a Sham Meeting of the State Committee on November 1, 2009
Knowing that she lacked sufficient votes to control the State Committee, Respondent Rodriguez embarked on a brazen plan to preclude legitimate voting members of the State Committee from participating in the November 1, 2009 meeting. The plan included the exclusion of two CYR officers and several CYR chapters in good standing, and packing the State Committee with hastily-formed new Chapters comprised almost entirely of members of the rival Young Republican Federation of California which had not yet completed the requirements for chartering under the CYR Bylaws.
1. Respondent Joy Notices a Meeting of the Initial Roll Committee with Only 11 Minutes Notice
At 9:49 a.m. on Sunday, November 1, 2009, Secretary Rohit Joy sent an email to the members of the Initial Roll Committee purporting to notice a telephonic meeting of the Initial Roll Committee only 11 minutes later at 10:00 am. Exhibit F, 11/1/09 9:49 a.m. email from Rohit Joy to Initial Roll Committee. This was the only time the members of the Initial Roll Committee were provided the dial-in number and passcode to join the telephonic meeting.
Under the CYR Bylaws, an Initial Roll Committee exists, among other things, for the purpose of making an initial determination as to who may vote on the State Committee. NOTE 5 Exhibit C, CYR Bylaws, Art. XVI, § A.2 at p. 25. The voting members of the Initial Roll Committee are the Secretary, Treasurer and the six Regional Vice-Presidents. Id., Art. XVI, § A.1 at p. 25. The State Chairman chairs the Initial Roll Committee, but may vote only to break a tie. Id.
2. Respondents Rodriguez and Joy Start the Meeting of the Initial Roll Committee Early and then Prevent Two Members from Voting on the Ground They Were “Late”
In addition to noticing the meeting at the last minute, Respondents Rodriguez and Joy started the meeting of the Initial Roll Committee three minutes early at 9:57 a.m. On information and belief, this was done with the hope that short notice would cause members of the Initial Roll Committee not involved in their scheme to inadvertently miss the meeting.
To the chagrin of Respondents Rodriguez and Joy, the meeting of the Initial Roll Committee was timely attended by then-Treasurer Andy Stanley, Northern Region Vice President Roger Eagleton and Central Region Vice President Tal Eslick. These three individuals formed a majority of the members of the Initial Roll Committee present at the meeting and none of them were involved with or sympathetic to Respondents’ scheme. NOTE 6 In a desperate effort to ensure control of the Initial Roll Committee, Respondents Rodriguez and Joy declared that Vice President Eagleton and Vice President Eslick – who had joined at 10:00 a.m. – could not vote on the ground that they were ‘late’ in joining the call.
3. Respondents Rodriguez and Joy Wrongfully Use the Initial Roll Committee to Deny Votes to Chapters in Good Standing and Improperly Recognize New Chapters Loyal to Them that were Not in Good Standing
After Respondents Rodriguez and Joy hijacked the Initial Roll Committee by improperly refusing to allow Vice Presidents Eagleton and Eslick to vote, the Initial Roll Committee for the November 1, 2009 refused to recognize several chapters that were in good standing and recognized several chapters that were not in good standing.
At the direction of Respondents Rodriguez and Joy, the Initial Roll Committee refused to recognize CYR Chapters from Kings, Kern, Monterey, Tulare and Fresno counties even though all but one of those chapters was unquestionably in good standing. In fact, the State Committee had previously determined at its meeting in July 2009 that the Monterey, Tulare and Kern county chapters had satisfied all the necessary requirements. Exhibit G, Minutes of 7/26/2009 State Committee Meeting. In doing so, Respondents effectively excluded virtually every chapter that had been on the rolls as of the last Annual Convention.
At the same time, the sham Initial Roll Committee controlled by Respondents Rodriguez and Joy purported to recognize chapters from Alameda, San Luis Obispo, San Mateo, San Francisco, Silicon Valley and Los Angeles counties. It did so even though several of these putative chapters had not paid dues and others had not provided the necessary documentation.
Respondent Rodriguez allowed no discussion, and no explanation was provided for these actions. NOTE 7 When then-Treasurer Stanley objected and attempted to discuss these matters, debate was cut off. The vote on these matters was 2-1, with then-Treasurer Stanley voting against these actions. The meeting of the Initial Roll Committee was adjourned at 10:03 am.
4. Having Hijacked the Nov. 1, 2009 Meeting Through Their Manipulation of the Initial Roll Committee, Respondents Cause the Meeting of the State Committee to Notice an Annual Convention for February 19, 2010
At the purported November 1, 2009 meeting of the State Committee called by Respondent Rodriguez, an Annual Convention was supposedly scheduled for the weekend of February 19, 2010. No minutes of the meeting were ever circulated by Respondent Joy.
C. The State Committee Holds a Valid Special Meeting on November 2, 2009 and Corrects the Improprieties of the November 1, 2009 Meeting and Schedules the 2009 Annual Convention for December 5, 2009
Notwithstanding desperate efforts by Respondent Rodriguez to abort it, the State Committee held a valid, special telephonic meeting on November 2, 2009 pursuant to the notice issued on September 29, 2009 at the behest of six of the State Officers. NOTE 8 At the meeting, all of the actions purportedly taken by the Initial Roll Committee prior to the November 1, 2009 meeting were reversed. In addition, the State Committee scheduled the 2009 Annual Convention for December 5, 2009. Exhibit K, Minutes of 11-2-2009 State Committee Meeting.
Following this meeting, a written “call to convention” was issued 30 days in advance both electronically and by U.S. mail. Exhibit L, 11-5-2009 Stanley email; Exhibit M, Call to Convention for Dec. 5, 2009 Annual Meeting. On November 2, 2009 at 6:36 p.m., Jenniffer Rodriguez sent an email to the members of the State Committee in an attempt to cancel the November 2, 2009 special meeting that had been called by other members of the State Committee. Exhibit I, 10/02/2009 Rodriguez email to State Committee. In her email, Ms. Rodriguez raised a number of spurious objections to the impending State Committee meeting. Among other things, Ms. Rodriguez argued that “[a]ll agenda items were aced upon at last night’s State Committee meeting” and that there remained “no business that is in order to discuss.” At 7:21 p.m., CYR Treasurer Andy Stanley responded with an email informing Ms. Rodriguez and the rest of the State Committee that the special meeting was properly noticed in accordance with the CYR Bylaws, that it would proceed as previously noticed at 8:00 p.m., and that everyone was welcome to participate. Exhibit J, 10/02/2009 Stanley email to State Committee.
D. The California Young Republicans Hold Their 2009 Annual Convention on December 5, 2009 and Elect New Officers.
On December 5, 2009, the California Young Republicans held their 2009 Annual Convention. At the Annual Convention, the following officers were duly elected:
Chairman Andy Stanley
Executive Vice Chair Amanda Richardson
Administrative Vice Chair Tal Eslick
Treasurer Ryan Dixon
Secretary Scott Raab
National Committeeman Zack Scrivner
National Committeewoman Dana Culhane
Communications Director Karen Elizes
Finance Director Joan Silva
Exhibit N, Minutes of 12-5-2009 CYR Annual Convention.
E. In Violation of the CYR Bylaws, Jennifer Rodriguez Ignores the Results of the December 5, 2009 Election and Purports to Hold an Annual Convention in February 2010, Where She Takes A Number of Illegitimate and Harmful Actions
Following the 2009 Annual Convention of the California Young Republicans held on December 5, 2009, Respondent Rodriguez simply ignored the results of the election. As if the Annual Convention and election had never been held, she continued to hold herself out as Chairman of the CYRs. She continued to present herself as CYR Chairman to candidates for public office, the public at large, and to the CYR’s affiliates, in particular the California Republican Party and the Young Republican National Federation.
Furthermore, Respondent Rodriguez proceeded to organize an illegitimate “convention” of her own which was held the weekend of February 19, 2010. The convention organized by Respondent Rodriguez violated CYR Bylaws at multiple levels, and constituted nothing short of an audacious effort to hijack the CYRs so that it could be dissolved or merged into the Young Republican Federation of California.
Individuals who had historically been involved with the CYRs refused to attend Respondent Rodriguez’s convention. Likewise, almost all of the existing CYR chapters in good standing also refused to attend. Instead, the persons in attendance consisted almost entirely of members of the Young Republican Federation of California (“YRFC”) who had been organized to assist in a calculated plan to take over the California Young Republicans.
Belying their takeover plans, the meeting was actually run in large part by two lawyers involved with the YRFC – current YRFC Chairman Adam Abrahms and YRFC General Counsel David Bartels. Respondent Rodriguez, who was then the former CYR State Chair, purported to preside over the meeting with the assistance of former CYR Secretary Respondent Joy.
Andy Stanley, who had been duly elected Chairman of the CYRs at the December 5, 2009 Annual Convention, and Executive Vice Chair Amanda Richardson both attended Ms. Rodriguez’s convention in order to object to the proceedings. When Mr. Stanley and Ms. Richardson attempted to address the meeting, Respondent Rodriguez refused to recognize them and they were rudely shouted down by members of the YRFC. At one point, a person designated by Respondent Rodriguez as the Sergeant at Arms physically threatened Mr. Stanley to prevent him from speaking. NOTE 9
1. Illegitimate Election of New Officers
At her convention in February 2010, Respondent Rodriguez purported to conduct an election of officers. Under the CYR Bylaws, the only officers up for election in 2010 were the three Regional Vice Presidents. Indeed, the Principal State Officers who had just been elected at the 2009 Annual Convention on December 5, 2009 were not up for election until the next odd numbered year, i.e., 2011. NOTE 10 Nevertheless, in direct violation of the CYR Bylaws – which expressly require that the Principal State Officers “be elected at the Annual Convention held in odd numbered years to hold office until the adjournment of the next odd numbered year’s Annual Convention” – Respondents purported to conduct an election of all State Officers.
In the election, Respondent Rodriguez was purportedly re-elected as State Chairman and Respondent Joy was purportedly re-elected as Secretary. All other incumbent State Officers – including all of the individuals validly elected on December 5, 2009 – were ostensibly replaced. Among the other officers purportedly elected at Respondent Rodriguez’s improper convention in February 2010 were high-ranking members of the Young Republican Federation of California. YRFC Chairman Adam Abrahms was supposedly elected National Committeeman and current YRFC General Counsel David Bartels was supposedly elected Executive Vice Chair. This purported election violated the CYR Bylaws in several ways. First, the election violated the clear mandate of the CYR Bylaws that the State Officers (other than the three Regional Vice Presidents) be elected in odd-numbered years. Second, those offices had already been filled for two-year terms at the December 5, 2009 Annual Convention.
The purported election was also invalid for several additional reasons. Because the November 1, 2009 meeting of the State Committee (as which the February 2010 convention was supposedly scheduled) was not timely noticed and was tainted by the wrongful exclusion of officers and chapters in good standing, all actions purportedly taken at that meeting are null and void, including the setting of the February 2010 convention. Second, the State Committee reversed all actions supposedly taken on November 1, 2009 at its subsequent meeting on November 2, 2009. Finally, the February 2010 Annual Convention itself was plagued by procedural and substantive infirmities, including the wrongful exclusion of CYR officers and chapters in good standing, the improper recognition of chapters not in good standing, and the failure to allow the proper Chairman Andy Stanley to preside or to even allow Mr. Stanley and Executive Vice Chair Richardson to participate. NOTE 11
2. Illegitimate Amendment of Bylaws to Allow for Dissolution of the CYRs or Merger with the YRFC
At her illegitimate convention, Respondent Rodriguez and others purported to adopt an amendment to the CYR Bylaws. This purported amendment is clearly intended to facilitate the merger of the California Young Republicans with the Young Republican Federation of California or to allow for the dissolution of the CYRs and for the CYRs’ assets to be transferred to the YRFC. Specifically, it provides:
[New Article] Article XXII: Mergers, Asset Transfers and Dissolution
Provided the State Committee is authorized by the previous Annual Convention to engage in discussions for the merger or unification of CYR with any other California Young Republican organization or for the transfer of assets to such other organization or for the dissolution of CYR, the State Committee shall have full authority under California law to take actions consistent which further such merger, unification, transfer or dissolution (“Transaction”). Such authority shall, to the extent consistent with California law, permit the State Committee to actually finalize and effectuate the Transaction without returning to the members for further authorization or ratification. To the extent member authorization or ratification is required under California law, only those members who were members both at the time of the membership ratification vote and members in good standing at the time of the previous Annual Convention shall be permitted to vote on such authorization or ratification. Notwithstanding any other provision of these Bylaws, should such a vote be required by state law or requested by the State Committee, such ratification vote may be conducted by means of telephonic, electronic mail or U.S. mail vote on no less than fourteen (14) days notice. Whether by State Committee or membership such a Transaction shall be approved upon the vote of at least fifty (50) percent plus one vote of those actually voting. This attempt to amend the CYR Bylaws is invalid for substantially the same reasons the election of officers is invalid.
3. Illegitimate Endorsement of Candidates in Republican Primaries
At the convention organized by Respondent Rodriguez, endorsements were provided to several Republican candidates for elected office. Consistent with the fact that the convention was attended almost entirely by members of the YRFC, the candidates given these purported “endorsements” were the same individuals previously endorsed by the YRFC.
Among others, an endorsement was provided to Gubernatorial candidate Steve Poizner. Respondent Rodriguez is employed by Steve Poizner for Governor, and information has recently come to light raising serious ethical questions concerning his purported endorsement. Indeed, a document provided to the CYRs by a former supporter of Respondent Rodriguez indicates that Mr. Poizner’s campaign, without public disclosure, provided an unprecedented $10,000 in funding for Respondent Rodriguez’s efforts to take over the California Young Republicans and merge it with the YRFC. NOTE 12 Exhibit O, Jennifer Rodriguez CYR Campaign Plan. These funds were in turn used by Respondent Rodriguez to pay the dues for supposed new CYR chapters admitted to stack the deck in Respondent Rodriguez’s favor. Exhibit P, Checks drawn from account of “Jenniffer Rodriguez for CYR Chair” used to pay dues for several putative CYR chapters.
For substantially the same reasons that the election of officers is invalid, these purported endorsements are also false and illegitimate. NOTE 13
III. Prior Efforts at Alternative Dispute Resolution
The California Young Republicans have attempted to make use of the dispute resolution procedures provided for in the bylaws of the California Republican Party and the bylaws of the Young Republican National Federation. All such efforts have been unavailing.
A. Efforts to Invoke Dispute Resolution with the California Republican Party
On January 19, 2010, CYR Chairman Andy Stanley wrote to California Republican Party Chairman Ron Nehring to invoke the dispute resolution procedures set forth in Section 3.09 of the bylaws of the California Republican Party. Exhibit S, 1/19/2010 letter from Stanley to Nehring. No response was ever received. On February 1, 2020, Mr. Stanley emailed Mr. Nehring to reiterate the request. Exhibit T, 2/1/2010 email from Stanley to Nehring. Again, no response was ever received.
Under Section 3.09(C)(2) of the bylaws of the California Republican Party, the dispute was required to be addressed within 30 days. Because more than 30 days have passed and no action has been taken by the California Republican Party, their dispute resolution procedures have been exhausted.
B. Efforts to Invoke Dispute Resolution with the Young Republican National Federation
On January 19, 2010, CYR Chairman Andy Stanley wrote to Audra Shay, the Chairman of the Young Republican National Federation (“YRNF”), attempting to invoke their dispute resolution procedures. Exhibit U, 1-19-2010 letter from Stanley to Shay. On February 10, 2010, the YRNF issued an administrative order dismissing the complaint as untimely on the theory that it was not filed within 30 days of the December 5, 2009 election. Exhibit V, 2/10/2010 Administrative Order of Dismissal. This order, and a prior statement of the YRNF’s position, Exhibit W, YRNF Statement on California Elections, make clear that the YRNF has no intention of intervening in the dispute and that it must be resolved by the CYRs themselves through this arbitration.
C. Troubling Evidence of Collusion and Attempts by Respondents to Improperly Influence Dispute Resolution Proceedings
Documents provided to the CYRs by an anonymous source within Respondent Rodriguez’s organization indicate that the Respondent Rodriguez’s actions were part of a larger scheme involving a number of prominent republican figures in California to hijack the CYRs and merge them with the YRFC.
Certain documents indicate that as part of this effort, Respondent Rodriguez or others associated with her scheme engaged in efforts to influence the outcome of any dispute resolution proceedings held by the YRNF. One document, for example, flatly states that the dispute resolutions committee of the YRNF “already plan to decide with Jenniffer.” Exhibit O, Jenniffer Rodriguez CYR Campaign Plan.
IV. The Arbitration Clauses
Article XIII, Section F.2 of the CYR bylaws contains the following arbitration clause:
Arbitration
In the event of any question regarding the election of an officer, whether arising from an alleged impropriety in electing delegates, accreditation of voters or otherwise, the ultimate power to decide who is entitled to hold any office in the CYRs rests with the American Arbitration Association (hereinafter ‘AAA’). In any action challenging the election of an officer under section 1 of this Section F, such officer shall be presumed to properly hold that office and only a contrary determination by the AAA may override that presumption. In the event of such challenge, the CYRs shall defend the action on behalf of the officer challenged, unless such officer chooses to defend the action him or herself. The AAA shall apply the law of the state of California in making any determination under this Section F. Unless the parties to such a dispute agree otherwise all disputes over the validity for the election of officers of the CYRs will be resolved by the AAA in Los Angeles, or in any other location on which the parties agree. Unless otherwise decided by the AAA, the cost of such arbitration shall be borne by the party challenging the election unless the results of the election are overturned, in which case the cost shall be borne by the CYRs. Each party shall be required to deposit the full cost of arbitration with the AAA if requested to do so. Unless otherwise decided by the AAA, any attorney’s fees of any party to the arbitration shall be borne by the respective party. If any party fails to follow the rules and procedures of the AAA, such party shall forfeit all claims to recognition by the CYRs, and the YRNF.
Exhibit C, CYR Bylaws, Art. XIII, § F.2, at p. 23 (emphasis added).
As a chartered organization of the California Republican Party, the CYRs also request that this arbitration be conducted in accordance with the arbitration procedures set forth in Section 3.09(D) of the bylaws of the California Republican Party. Section 3.09(D) of the California Republican Party bylaws provide as follows.
(D) If a delegate or Committee-chartered organization is a party to a dispute or conflict subject to this Article and such delegate or Committee-chartered organization has exhausted all administrative remedies set forth in this section, such delegate or Committee- chartered organization may, by notice as herein provided, require that the dispute be submitted under the Commercial Arbitration Rules of the American Arbitration Association to an arbitrator in good standing with the American Arbitration Association within 15 days after such notice is given. Any such arbitrator so selected is to be mutually acceptable to both parties. If both parties are unable to agree upon a single arbitrator, each party, at its respective cost and by giving written notice to the other party, shall appoint one arbitrator. If either party does not appoint an arbitrator within 10 days after the other party has given notice of the name of the arbitrator, the single arbitrator appointed by the party giving notice shall be the sole arbitrator and such arbitrator’s decision shall be binding upon both parties. If two arbitrators are appointed, these two arbitrators shall appoint a third arbitrator who shall proceed to resolve the question. The appointment of a third arbitrator shall be made within 10 days following the appointment of the first two arbitrators. If the two arbitrators first appointed cannot agree upon a third arbitrator, the third arbitrator shall be chosen by the Presiding Judge of the Superior Court of the County of Los Angeles, State of California. Each Party shall bear one-half (½) of the cost of appointing the third arbitrator and of paying the third arbitrator’s or agreed arbitrator’s fees. The written decision of the single arbitrator ultimately appointed by or for both parties shall be binding and conclusive on the parties. Judgment may be entered on such written decision by the single arbitrator in any court having jurisdiction and the parties consent to the jurisdiction of the Municipal and Superior Court of Los Angeles, California for this purpose. Any arbitration undertaken pursuant to the terms of this section shall occur in Los Angeles, California. All notices given pursuant to this section shall be in writing and shall be sent certified mail, return receipt requested.
Exhibit B, State GOP Bylaws, §3.09(D), at p. 52 (emphasis added). NOTE 14
V. The Claim or Relief Sought
The California Young Republicans seek declaratory relief establishing that the officers elected at the December 2009 Annual Convention are the duly-elected officers of California Young Republicans. The California Young Republicans also seek a declaration that all actions purportedly held at the February 2010 convention organized by Respondent Rodriguez – including the election of officers, amendment of the CYR bylaws, and candidate endorsements – are void ab initio. The California Young Republicans further seek a judicial declaration that Respondents Rodriguez and Joy have breached their fiduciary obligations by putting their own political ambitions and personal political agendas ahead of the best interests of the corporation and by engaging in the numerous violations of the CYR Bylaws and other wrongful acts discussed above.
In addition to declaratory relief, the California Young Republicans seek preliminary and permanent injunctive relief, and such other relief as may be just and proper.
VI. Request for Expedited Arbitration
This dispute is causing severe and irreparable injury to the California Young Republicans. It threatens to have a very negative impact on the name and good reputation of the California Young Republicans. Because the 2010 primary elections are already underway and the general election is not far off, it also threatens to impact the ability of the CYRs to carry out their mission during this important election cycle.
The negative impact of having a second group of individuals falsely claiming to be officers of the corporation and purporting to take fundamental actions on behalf of the corporation cannot be overstated. Indeed, the Young Republican National Federation has stated that “if this matter is not resolved by the spring, it may be impossible for the National Committee to determine whether the CYRs have submitted a full and complete state survey and ultimately compromise their charter as the recognized organization of Young Republicans in California.”
Exhibit W, YRNF Statement on California Elections.
Accordingly, the California Young Republicans request that this arbitration be administered on an expedited basis.
Respectfully submitted,
Glen E. Summers
Bartlit Beck Herman Palenchar & Scott LLP
Attorney for Claimant
California Young Republicans, Inc.
