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.

297

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 --

298

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

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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.

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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."

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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

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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.

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19

20 ___________________________ Katie Bradford, CSR 90-0148

21 Court Reporter (503) 267-5112

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