Los Angeles County Bar Association: Its Year in Review

Thursday, December 28, 2017

Page 4

Los Angeles County Bar Association: Its Year in Review

A Turbulent First Six Months Is Followed by Six Months of Calm and Rebuilding

As of July 1, the Los Angeles County Bar Association had a change in leadership and a change in direction. During the first six months of the year, however, there was a tug-of-war between the Old Guard and the new, with a purported nullification of election results, erupting in a Los Angeles Superior Court writ proceeding.

During those first six months, Margaret Stevens was president (as she had been during the last six months of 2016). She had opposed the “reform” candidates who prevailed in the 2016 election—LACBA’s first contested election in 25 years—but now had to work with them.

Despite the election coup in 2016, the reformers were not in control of the board. Trustees have two-year terms, so half of the trustees had been elected in 2015; two non-reform candidates were elected in 2016, not having been opposed; Stevens made appointments to three assistant vice president posts and appointed the treasurer; the immediate past president, Paul Kiesel, her ally, was automatically on the board. So, she had the votes.

The acrimony during those first six months of this year harks to late 2015 when leaders of sections banded together to oppose a proposed bylaw change that would have stripped sections of any say as to their finances. Six of them—including two past LACBA presidents, John Carson and Charles Michaels—appeared at the Nov. 18 meeting of the Board of Trustees. They wanted to speak. Kiesel said they couldn’t, proclaiming: “This is a Board of Trustees discussion. I don’t think it would be appropriate to have non-trustees speak.” The sentiment of the trustees was contrary to his, and he acquiesced, admonishing the visitors not to speak too long. Consideration of the proposed bylaw was postponed for two months, later put off again. Despite Kiesel’s vow to see it passed during his administration, it never came to a vote, and is dead.

Section leaders, discerning that they had common interests, formed the Council of Sections, with Carson chairing it. Members of the group found they were in agreement that LACBA was on a suicide course by giving away funds to charitable projects when it was losing about $1 million a year, dipping deeper and deeper into its reserves; that there was far too much secrecy in the organization which refused to disclose its finances to members and would not provide copies of its bylaws; and that “LACBA Central,” as Bradley Pauley, then chair of the Appellate Law Section, termed the staff hierarchy, was unresponsive to sections’ needs and, beyond that, sought to regiment them. Chief Executive Officer Sally Suchil and General Counsel/Chief Administrative Officer Clark Brown were looked upon with general disfavor, and criticism of Kiesel’s performance as president mounted.

In 2016, the Council put up a slate of reform candidates. All three elective officer positions (president-elect, senior vice president, and vice president) were won, with Michael E. Meyer chosen as president-elect. There were nine trustee slots in 2016; five were contested, and Council of Section candidates won all of them; the Council lacked a candidate in two races, and endorsed the Nominating Committee selections for the two remaining seats.

LACBA activities predominated legal community news this year, and they are summarized below rather than being interspersed with other events in the customary year-end wrap-up, which will appear in Tuesday’s issue.

January

13—Sally Suchil left her post as chief executive officer. Suchil had come under fire the previous year in the wake of the revelation by Carson that she customarily came to work at about 4 p.m. and that staff members were lined up to confer with her on matters before their own 5 p.m. check-out times. Stevens opposed Suchil being eased out; Meyer spurred it. Suchil received $350,289 in severance pay, engineered by Stevens and undisclosed at the time to trustees (pursuant to a confidentiality agreement), though later uncovered. Suchil’s full recompense through the years, previously secret, appears in a box below.

February

27—LACBA’s Nominating Committee made selections for officer and trustee positions. For the most part, it backed persons endorsed by the Council of Sections and Meyer—but with Stevens pushing in another direction, there were some compromises. This year’s Nominating Committee (comprised of present officers and past and present trustees chosen by lot) nominated all three of the Council-backed candidates for officer positions: Brian S. Kabateck, founder and managing partner of Kabateck Brown Kellner LLP, for president-elect; Tamila C. Jensen, a past president of the San Fernando Valley Bar Association, for senior vice president; and Deputy City Attorney Philip H. Lam, a former president of the Southern California Chinese Lawyers Association, as well as the Lesbian and Gay Bar Association, as vice president. It nominated for trustee positions Council-supported candidates Kristin Adrian, Susan J. Booth, Matthew W. McMurtrey, Kevin L. Vick, and Felix Woo. It also nominated four others: Tanya Forsheit, Jennifer W. Leland, Firoozeh “Faye” Nia, and Michael R. Sohigian.

March

1—The METNEWS reported: “Consumer attorney Brian S. Kabateck, founder and managing partner of Kabateck Brown Kellner LLP, is the choice of the Los Angeles County Bar Association’s Nominating Committee for president-elect of the organization, with the committee on Monday night, spurning an effort by the immediate past president, Paul Kiesel, to gain backing for someone else. [¶] The METNEWS has learned that although Kabateck was favored by President-Elect Michael E. Meyer, who will become LACBA president on July 1, Kiesel pushed for the nomination of Michael K. Lindsey, a partner in Steinbrecher & Span. Meyer, chairman of the Los Angeles offices of DLA Piper, gained his post last June by defeating Lindsey—then LACBA’s senior vice president and treasurer—by a membership vote of 1,273 to 448. [¶] Despite last year’s vote, Kiesel sought to have Lindsey nominated as president-elect this year, and Kabateck to be chosen either as senior vice president or vice president, according to a knowledgeable source.” The Daily Journal ran a similar story two days later. The news articles would later serve as the purported justification for unusual actions.

22—No nominating petitions for officer or trustee positions were filed by the 5 p.m. deadline which, under the bylaws, meant that choices of the Nominating Committee were to be deemed elected. There remained, however, one ministerial chore to be performed by Stevens. Art. VII, §4 provides that if the Nominating Committee’s nominees go unchallenged, “then the President shall instruct the Chief Executive Officer to cast a ballot for those nominated on the next business day after the deadline for filing additional nominations pursuant to Section 3 of this Article, thus unanimously electing all candidates.”…At that night’s meeting of the Board of Trustees, Stevens, in a closed session, drew attention to the March 1 METNEWS article. It was decided—after Stevens and all others who were on the Nominating Committee exited—that a three-member task force would be formed to investigate the source of the article. The stated purpose was to determine if a member of the committee leaked the information in breach of a vow of confidentiality. (The source has not been unveiled.)

23—The duty befell Stevens, under a bylaw, to cause certification of the election results. LACBA’s public information officer Jason Ysais, responding to an inquiry from the METNEWS, said in an email: “It has been confirmed that we are not having an election this year.” It later emerged that Stevens had refused to cause certification of the election results.

April

26—The Board of Trustees went into executive session. Members of the Nominating Committee were recused, some voluntarily. Others were banished over their protests, as was trustee Jo-Ann Grace, co-publisher of the METNEWS, who was not on the Nominating Committee. By a 6-5 vote—with LACBA Treasurer Duncan Crabtree-Ireland, an appointee of Stevens, chairing the session and breaking a tie—the group declared the election results invalid.

27—LACBA issued a statement saying: “Based on the findings of [the task force] report, the non-recused Board determined that the nomination process had been seriously compromised by breaches of confidentiality and decided to re-conduct the Nominating Committee process for 2017, including: selection of confidential Nominating Committee members, conducting one or more meetings to determine a proposed slate of Officers and new Trustees for the 2017-2018 bar year, releasing the identity of those nominees, then allowing for contesting candidates to submit their candidacy, if any, and finally to determine if an election process is required.”

May

15—Six members of LACBA, including two current officers and a past president, brought suit in Los Angeles Superior Court against the organization under Corporations Code §7616, which provides that the court may “determine the validity of any election” conducted by a nonprofit mutual benefit corporation, such as LACBA. “Plaintiffs bring this action,” the pleading sets forth, “to have the results of the original election confirmed, to have the new election proceedings enjoined and invalidated, and to declare the rights and duties of the parties under California law and LACBA’s Bylaws.” Susan J. Booth, a partner in Holland & Knight, was the lead plaintiff. She was chair of LACBA’s Real Property Section and was chosen by the Nominating Committee on Feb. 27 for a spot on the Board of Trustees. Plaintiffs, along with Booth, were LACBA Senior Vice President Philip H. Lam, whose March 22 election as vice president was in dispute; Vice President Tamila C. Jensen, seeking to establish the validity of her election as senior vice president; Trustees William L. Winslow and Edwin C. Summers III who, according to the complaint, were forcibly recused “on grounds not specified in or permitted under LACBA’s Bylaws”; and Harry L. Hathaway, a former president of LACBA and co-founder of the Senior Lawyers Section….A newly constituted nominating committee met that night. In advance of that preliminary meeting, Kabateck said in a letter to Stevens and Meyer with a copy to trustees: “We all need to heal the LACBA. If you re-elect the March unopposed slate of officers and trustees, you immediately end the discussion about hijacked elections. You allow us to immediately focus on the future. Throwing out that slate and electing a different leadership group will further damage the reputation of the LACBA, undermine that group’s ability to lead, and cause further scrutiny of your operations. Instead of moving forward you will move backwards.”

16—Los Angeles Superior Court Judge James Chalfant denied a temporary restraining order against holding a new election after LACBA General Counsel Clark Brown revealed at the hearing that Stevens had not caused the results of the first election to be certified. That meant, Chalfant reasoned, that no election had yet occurred. He granted leave for an amended complaint to be filed. Brown also represented that the bylaws were amended at the April 26 executive session to authorize a new election. Stevens said, in a statement: “It is a sad day when Officers and Trustees resort to a lawsuit to resolve our differences, rather than setting the example on how we resolve this challenging situation. The Court was not persuaded by the Plaintiffs’ claims of urgency or harm, and found no reason to interfere with the Board’s decision to reconvene the Nominating Committee. This ruling is consistent with the non-recused Board of 11 Trustees finding that the nomination process was severely compromised, and decided the most fair and reasonable response would be to re-convene the process. I stand behind the integrity with which the Board acted to correct a tainted process, which was no reflection on the merits of the candidates.” Former LACBA President Charles Michaels commented: “It was a strange ruling because the power to declare the election completed was in the hands of the LACBA president and CEO who failed to follow the mandated LACBA process….While we lost on the TRO, this fight is far from over....We regret having this fight, but the principles and values involved in this fight are worth fighting for.” With uncertainty over who the incoming officers and trustees would be—and a second election scheduled to end June 30, if there were contested seats, the day before those elected were to take office, no installation dinner plans were in progress.

19—The new nominating committee renominated persons for officer and trustee posts who had been chosen by the initial nominating committee on Feb. 27, and whose election to office was announced March 23 when no one became a rival candidate by the previous day’s deadline for filing nominating petitions. However, that did not render Booth v. LACBA moot because other candidates could still run by gathering 100 signatures on a petition….Rick Cohen, former president/chief executive at Buchalter, was named as interim chief executive officer. He assumed the post May 22, in advance of a contract being signed. It was announced that he would hold the post “through 2018” but he later clarified that it was to be a 12-month stint.

22—A first amended complaint was filed in Booth v. LACBA. The prayer asked that “the Court issue a temporary restraining order, a preliminary injunction, and a permanent injunction ordering Defendant to direct its President, Margaret Stevens, to instruct Defendant’s CEO to cast a ballot for those nominated by the NomCom.” Five declarations of trustees—including Senior Vice President Philip Lam and Vice President Tamila Jensen—were filed disputing the representation by Brown that the bylaws had been amended to authorize a second election. The declarations were filed in connection with a new hearing on a preliminary injunction, set for June 13.

31—LACBA took the position in its opposition to a preliminary injunction that six members of its 28-member Board of Trustees had the power to amend the bylaws on-the-spot, in a closed session, to permit a restaging of the 2017 election of officers and trustees. Trustee Natasha R. Chesler, who was at the session, said in a declaration: “I recall various Trustees stating that we could not just pass a resolution with new dates for the relevant events, but that we also needed to amend the Bylaws. One Trustee proposed that we pass a resolution similar in wording to: ‘The Bylaws shall be amended to the extent necessary to accomplish the goal of re-convening the Nominating Committee and allowing for a contested election, should that be necessary.’ Another Trustee objected that this proposed resolution was not specific enough. There was discussion that we were not substantively amending the Bylaws but only adjusting the dates specified in the Bylaws. Based on the discussions, including disagreements about how to accomplish the goal, a motion was made to ‘redo’ the nomination process, including to amend the dates in the Bylaws….” In a declaration, Stevens did not point to any authority for declining to certify the election results, but explained: “Because of the breaches of confidentiality during the nomination process, I did not certify the nominees as winners of the election with either of LACBA’s acting Co-Interim CEOs Clark Brown and/or Bruce Berra,” adding: “On February 28, 2017, LACBA publicly announced the nominees chosen by the Nominating Committee for the 2017-2018 term. Immediately after this announcement, one nominee and deliberations about him were printed in the Metropolitan News. I also began receiving calls and emails from concerned members, asking why the process was not confidential this year. Some of these emails revealed that the names of the nominees and the substance of the Committee’s deliberations were known outside of the Nominations Committee.”

June

2—LACBA General Counsel/Chief Administrative Officer Clark Brown retired.

13—Chalfant conditionally granted a preliminary injunction, effective two days from then, barring LACBA from continuing to conduct a new election for officers and trustees—but only if someone filed a nominating petition by the following day’s deadline challenging one of the three plaintiffs who was a candidate. Those plaintiffs were Jensen, running for senior vice president; Lam, seeking the post of vice president; and Booth, the lead plaintiff, a candidate for a seat on the Board of Trustees. Chalfant found that Jensen, Lam and Booth would “be harmed if somebody runs against them.” Chalfant broadly hinted that he would have declared the Feb. 27 slate of officers and trustees elected if a writ had been sought compelling Stevens to cause certification. Chalfant said he cannot do what he has not been asked to do, and has “not been asked” to order consummation of that election.

14—No candidate filed a nominating petition….The Board of Trustees, at its monthly meeting, instructed Stevens to cause a certification of the March election results….Chief Bankruptcy Judge Sheri Bluebond of the Central District of California, who has become a controversial figure within the local bar, was approved by trustees as a replacement on the board for Richard Lewis, who resigned Oct. 26 of last year. Lewis, a former president of the San Fernando Valley Bar Association, was elected as a reform candidate but stepped aside for health reasons. Under a bylaw, the board is to fill a vacancy within 30 days, except if there is good cause for a delay. The matter of filling Lewis’s vacancy had been overlooked. A proposed resolution was provided to trustees slightly less than 24 hours before that night’s meeting which recited: “The Board of Trustees hereby approved the appointment of Hon. Sheri A. Bluebond to serve as Trustee from Affiliates through June 30, 2018.” Stevens was reminded that under the bylaws, she does not appoint a person to a vacancy on the board, subject to confirmation; rather, the board makes the appointment. Dissatisfaction was expressed over the tardiness of the submission of the proposal, and that it was coming only a half a month before Meyer was to take the helm. A motion was made that the appointment be put over a month, until Meyer took office, but it failed on a vote of 9-7. Meyer expressed the wish that, for sake of harmony and reconciliation, the appointment be made unanimous, and no negative votes were cast. Bluebond had initially joined forces with the Council of Sections. Last year, attorney Anthony de los Reyes, who was set to run for one of the trustee positions, stepped aside so that Bluebond could be the reform candidate but, after the deadline for candidacies-by-petition, she decided that judicial ethics precluded her for running for a contested office, and Diana K. Rodgers was elected without opposition.

15—At Stevens’ direction, Interim Chief Executive Officer Rick Cohen cast a ballot for the Nominating Committee’s Feb. 27 slate of candidates, the final step in the election process. Stevens on May 18 declined, through a spokesperson, to explain her rationale in refusing to act in conformity with that bylaw. In none of the papers filed in Booth v. LACBA or in any public statements by Stevens or any spokesperson has a legal rationale been explicated.

July

1—New officers and board members took office.

11—For the first time in several years, detailed information as to LACBA’s finances was disseminated. It was provided to John Carson who had been denied any such information while chair of the Senior Lawyers Section, under the Kiesel regime. A detailed report for the first quarter of the calendar year was distributed by Carson to members of the Council of Sections and others. It showed revenues of $3,197,709—$123,152 more than the expenses of $3,074,557. Those revenues included, however, $654,000 that is not in LACBA’s general coffers, but is a cy pres award in a restricted account, to be used over a five-year period for a veterans project of the Counsel for Justice. With that amount deducted, there is roughly a $531,000 loss. However, the loss has been shrinking. A financial summary sent to trustees and section leaders, reflecting figures through the end of May, showed a loss to that point of $374,631. LACBA’s reserves were nearly $7 million in 2013, but down to $4.6 million as of the end of 2016.

12—Meyer told members of the Board of Trustees at its monthly meeting that he wants to end secrecy within the organization, place the full board and not the officers in the role of the real decisionmakers, and stop the siphoning of funds to the group’s charitable arm, Counsel for Justice. As Meyer and others discussed how policies and practices need to diverge from those of the past, Stevens, automatically a member of the board as immediate past president, sat silent and stone-faced, strutting from the meeting early. Bluebond cautioned trustees that a member of the press was present, indicating they might wish to take that into account in fashioning their comments. Meyer responded: “I don’t think we have anything to hide.” He declared that reporters for other newspapers will be encouraged to attend board meetings, and noted that any LACBA member is always welcome to come. In recent years, major decisions were made for LACBA by the Executive Committee, comprised of the officers, and brought to the Board of Trustees the following night for rubber-stamping. Meyer pledged: “I’m going to place much less reliance on the Executive Committee.” The committee has not met this year….The interim CEO, Rick Cohen, told trustees a bylaw change was compulsory. He declared: “For tax purposes, we are, in fact, a mutual benefit corporation. For corporate law purposes, we’re actually forbidden by the statute to be a mutual benefit association. We have to be a public benefit corporation. So, I have to make that amendment. If you don’t believe me, look in the book.” Five trustees signed a hand-printed proposal, on the spot, to recommend making the bylaw change so that it could be considered at the next meeting. However, some persons did look at the “book”—the Corporations Code—and concluded that Cohen had misrepresented the law. Four of the five trustees withdrew their support and Cohen’s proposal has not been discussed further.

21—Rick Cohen resigned as interim chief executive officer of the Los Angeles County Bar Association, one day short of two months since he assumed the post, departing amidst disgruntlement over his forceful manner and his attempt to steer LACBA into the status of a public benefit corporation. Suspicions arose that Cohen—whose selection for the one-year post was recommended by Stevens—was seeking to legitimate the siphoning of LACBA funds to charitable activities of the group’s Counsel for Justice. LACBA has been losing money yet, as of the end of 2016, CFJ owed the association $3,522,159, after receiving that year a forgiveness of $776.770 in debt.

August

23—President-Elect Brian Kabateck suggested updating the March 26, 1990 policy which declares that “[m]eetings of the Board of Trustees shall be open to the press” by eliminating the requirements that a reporter possess a Los Angeles Police Department press pass (which enables the bearer to cross police and fire lines) and that members of the press sit at a separate table. He recommended retaining the requirements that the president announce that “a press representative is present,” and that coverage of executive sessions be precluded. Bluebond declared: “We need to be able to talk frankly. We cannot do that with the presence of the press. I would not permit the press.” While no one sided with Bluebond on that proposition, one trustee who was present, Tanya Forsheit, expressed concern over members of the board being electronically recorded. Trustee Diana K. Rodgers, who was absent, argued in an email that the press should be barred from electronically recording statements of any trustee who forbade being recorded. Forsheit maintained that the meeting was “not a public forum,” but Meyer advised: “These meetings are open to anybody.” Meyer said he and Kabateck would draft a proposed updated policy.

October

26—Trustees reaffirmed a 1990 policy that members of the press be admitted to their monthly meetings, except when in executive session, and updated it by stating: “All press representatives may bring the equipment they normally use to report on stories, including electronic recording devices.” It deleted the requirement that a reporter have a press pass and that a separate table be set up for members of the news media. Kabateck moved for acceptance of the policy. In response to the argument by Forsheit that it would invade privacy to permit recording without trustees’ knowledge, Kabateck amended his motion to provide that there be a sign posted saying: “Persons attending the meeting shall presume they are being recorded.” Rodgers cast the sole negative vote. Bluebond was not present….A new privacy policy was adopted. Under it, section chairs will receive names and email addresses of all members of their section unless the member opts out. There had been complaints during Sally Suchil’s tenure as chief executive officer of section listservs being monitored by staff, with some messages censored, and of excessive restrictions on use of the listservs with respect to content and a ban on attachments or insertion of graphics.

December

6—The Board of Trustees voted to hire Stanley S. Bissey—presently executive director and chief executive officer of the California Judges Association—as the group’s executive director, effective Jan. 16. Bissey, 53, will receive an annual salary of $220,000. A screening committee narrowed the applicants to three, including Bissey, all from outside of Los Angeles, who were interviewed by trustees at a special session on Nov. 7. The board, in closed session, tentatively decided at its Nov. 15 meeting to hire him, pending arriving at an agreement as to employment terms. Provisions were inserted in a contract aimed at avoiding problems that arose in connection with his two immediate predecessors. He is at at-will employee, though terms of that employment, envisioned to be for two years, are spelled out in a contract. One of the terms is that upon cessation of his employment, he will receive no compensation beyond unpaid salary. The title is specified as “executive director,” rather than CEO (an enhanced title Suchil acquired in 2013).

18—Michael E. Meyer was ceremonially installed as president of LACBA, along with other officers and trustees. Well over 400 persons were in attendance at a reception held at the Biltmore Hotel. Margaret Stevens was not among them. Traditionally, the outgoing president participates in the program. Stevens did not respond to a request for comment on her absence. Meyer told the assemblage that LACBA had become “kind of a secret society” and that his goal, and that of the trustees, has been “to create transparency.” He declared: “Really, there’s no secrecy anymore.”

—Roger M. Grace

_________________________________________________________

Sally Suchil’s Secret Salary Stated

Nearly a year since Sally Suchil departed as chief executive officer of the Los Angeles County Bar Association, information as to the matter of her pay, never before fully disclosed, has been provided to the METNEWS in response to a request.

At the time Suchil was hired in late 2009 as executive director, her salary was kept secret even from members of the Board of Trustees, and in the years that followed, was not divulged by LACBA other than in tax returns.

LACBA’s federal Form 990 tax returns recited:

“LACBA does not directly make its governing documents, conflict of interest policy, and financial statements available to the public; although many of these documents are available to the public through governmental operations.”

After the Council of Sections was formed in late 2015, 990 tax returns were obtained from the Internal Revenue Service. However, they told only part of the picture.

Suchil’s salary as reported on those forms was less—though only slightly less—than reflected by the figures recently acquired.

For example, it was disclosed at the March 2016 Council of Sections meeting, and reported here, that in 2013, Suchil drew $347,261, including benefits, as shown on the 990. This was the sum of “reportable compensation” of $300,066 and “other” compensation (including medical benefits, parking, and insurance) of $47,195.

Yet, according to figures supplied by staff this month, at the direction of President Michael E. Meyer and President-Elect Brian Kabateck, her base pay in 2013 was $262,500, vacation payout was $20,266, and bonus was $20,000, totaling $302,726; adding to that the “other compensation”, reflected on the 990, the actual figure was $349,921, not $347.261.

While the discrepancy is small—$2,660—there is a discrepancy.

Kabateck found out why. He said that the 990s did not take into account “pretax deductions,” explaining:

“These deductions modify the gross wages so that the individual pays less income tax. The County Bar has this for their employees. This is why the 990 displays slightly less amount of compensation each year. The pretax deductions can range from flex spending deductions to other health insurance deductions.”

With respect to the high amount in 2015, Kabateck related:

“Half of her bonuses earned in the first five years were held by agreement until five years of employment were completed. This is why the bonuses in year 2015 seems larger than other years. Much of this amount was earned bonuses from prior years.”

Below are figures which, according to the latest information supplied by LACBA, plus “other compensation” appearing on the 990s (starting in 2012), indicate Suchil’s total compensation.

2010: $200,000

2011: $245,000

2012: $280,540

2013: $349,921

2014: $360,094

2015: $386,795

2016: $322,673

The figure for last year does not include a bonus, the first time since 2010 that a bonus was denied Suchil. Bonuses through the years ranged from $15,000 in 2012 to the mega-bonus in 2015 of $62,582.