Reform Party of U.S. v. Gargan, 6:00CV00014.

• Court: United States District Courts. 4th Circuit. United States District Court (Western District of Virginia)
• Writing for the Court: Moon
• Citation: 89 F.Supp.2d 751
• Parties: REFORM PARTY OF THE UNITED STATES of America, et. al., Plaintiffs, v. John J. GARGAN, et. al., Defendants. Reform Party of the United States Of America, et. al., Plaintiffs, v. Russell J. Verney, et. al., Defendants.
• Docket Number: No. 6:00CV50012.,No. 6:00CV00014.,6:00CV00014.,6:00CV50012.
• Decision Date: 27 March 2000

89 F.Supp.2d 751 REFORM PARTY OF THE UNITED STATES of America, et. al., Plaintiffs,
v.
John J. GARGAN, et. al., Defendants.
Reform Party of the United States Of America, et. al., Plaintiffs,
v.
Russell J. Verney, et. al., Defendants. No. 6:00CV00014. No. 6:00CV50012. United States District Court, W.D. Virginia, Lynchburg Division. March 27, 2000.

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Dale A. Cooter, Cooter, Mangold, Tompert & Wayson, P.L.L.C., Washington, DC, for Reform Party of the U.S., Russell J. Verney.

Tracey A. Lenox, Lenox, Biddinger & Conrad, PC, Woodbridge, VA, for John J. Gargan, Reform Party of the U.S.

Stephen E. Hershkowitz, Richard B. Bader, Robert W. Bonham, III, Federal Election Commission, Washington, DC, for Federal Election Com'n, amicus.

OPINION

MOON, District Judge.

John J. Gargan and Pat Choate each claim to be the Chair of the Reform Party of the United States of America (hereinafter "Reform Party" or "Party"). Gargan and his ally Ronn Young were elected National Party Chair and Treasurer, respectively, at a National Convention in Dearborn, Michigan in July, 1999 (hereinafter "Dearborn Convention"). Choate claims to be the National Party Chair by virtue of a vote of more than two-thirds of the Party's National Committee on February 12, 2000 in Nashville, Tennessee (hereinafter "Nashville Meeting"), which recalled Gargan and Young and elected Choate and Tom McLaughlin as Interim Party Chair and Treasurer, respectively. Young filed suit in the United States District Court for the Western District of Virginia, Harrisonburg Division, seeking among other things for the Court to order Russell Verney, Gerald Moan, and various other individuals aligned with Choate (hereinafter "Choate group") to cease interfering with the administration of Gargan and Young (hereinafter "Gargan group") in their operation of the Reform Party. The Choate group filed suit against the Gargan group in the United States District Court for the Western District of Virginia, Lynchburg Division, seeking

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among other things for the Court to enjoin the Gargan group from interfering with the Choate group's operations of the Reform Party.

On February 24, 2000, this Court, in the Lynchburg case, ordered the Gargan group to pay into the registry of the Court approximately $2.5 million in federal money it had received from the Federal Election Commission (hereinafter "FEC" or "Commission") to be held preliminarily until a decision as to the rightful leadership of the Party could be determined at a trial to begin on March 22, 2000. On March 13, 2000, the Harrisonburg and Lynchburg cases were consolidated for trial. On March 16, 2000, this Court bifurcated the case for trial purposes, ordering that only the issue of the rightful leadership of the Reform Party would be heard beginning on March 22 and postponing until a later date a trial (if necessary) on subsequent damages.

The essential question before this Court is whether the February 12, 2000 Nashville Meeting, purporting to be a meeting of the National Committee of the Reform Party at which Gargan and Young were recalled as officers, was a duly constituted meeting of the National Committee with the power to take such actions? The Gargan group maintains that the meeting was not a duly constituted meeting with authority to remove him as National Party Chair for the following reasons:

1. The Nashville Meeting was called at an invalid meeting of the Executive Committee,

2. The National Committee membership was not given proper notice of the meeting,

3. Gargan, the Chair who was present at the Nashville Meeting, refused to call the meeting to order, and

4. There were not enough properly credentialed National Committee members to remove Gargan and Young by a two-thirds vote of all registered members.

The Court concludes that the February 12, 2000 Nashville Meeting was called at the request of one-fourth of members of the National Committee, that reasonable notice was given of this meeting, that the meeting was properly called to order and presided over by the Party's Vice Chair, and that more than two-thirds of the registered members of the National Committee voted to recall Gargan and Young and to elect Choate and McLaughlin to succeed them as National Party Chair and Treasurer, respectively. Therefore, the February 12, 2000 Nashville Meeting was a duly constituted meeting of the Reform Party National Committee with authority to remove its officers and elect new ones.

JURISDICTION

This Court has diversity jurisdiction pursuant to 28 U.S.C. § 1332 and federal question jurisdiction pursuant to 28 U.S.C. § 1331, in that this matter arises under the Federal Election Campaign Act of 1971, 2 U.S.C. § 431, et seq. Venue properly rests in this Court pursuant to 28 U.S.C. § 1391(a)(2) and (3).

FINDINGS OF FACT

1. The Reform Party of the United States of America is a national political party organization registered with the Federal Election Commission. The Reform Party is a minor party, which is defined as a political party "whose candidate for the office of President in the preceding presidential election received, as the candidate of such party, 5 percent or more, but less than 25 percent of the total number of popular votes received by all candidates for such office." 26 U.S.C. § 9002(7); 11 C.F.R. § 9008.2(d).

2. As a minor party, the Reform Party is entitled to federal funding of its quadrennial presidential nominating convention under the Presidential Election Campaign Fund Act. See 26 U.S.C. § 9008. Under funding formulas set forth by statute and FEC regulations, the Reform Party was entitled to $2,468,921 in convention funds. See 26 U.S.C. § 9008(b)(2); 11 C.F.R. § 9008.4(b).

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3. To qualify for entitlement and to receive benefits, minor political parties must establish a Convention Committee, which in turn must register with the FEC as a political committee pursuant to 11 C.F.R. part 102. See 26 U.S.C. § 9008(b)(3); 11 C.F.R. § 9008.3(a). The Party's National Committee must file an application statement containing certain information prescribed by the Commission at 11 C.F.R. § 9008.3(a)(3). By letter, the Convention Committee must agree to certain conditions set forth at 11 C.F.R. § 9008.3(a)(4). That section further provides that the agreement is also binding upon the National Committee.

4. The Reform Party is governed by a constitution that was adopted on November 2, 1997. The constitution specifically states that "[t]he rules contained in the current edition of Robert's Rules of Order, Newly Revised, shall govern this convention in all cases to which they are applicable and are not inconsistent with any Rules, Bylaws, Constitution or resolutions adopted by the National Convention or National Committee." Art. XII. The Reform Party has not passed any bylaws.

5. The Reform Party constitution provides for a National Convention, which shall be "the supreme governing body of the Reform Party at the national level." Art. III, § 9(a). Under the National Convention is a National Committee, which shall be "responsible for the conducting of the business and affairs of the Reform Party between sessions of the National Convention." Art. IV, § 1. Under the National Committee is an Executive Committee, which shall be "responsible for the conducting of the day to day business and affairs of the Reform Party, between meetings of the National Committee." Art. V, § 1.

6. The Reform Party constitution also provides for the National Party Officers of Chair, Vice Chair, Secretary, and Treasurer. Art. VIII, § 1. Among other duties, the National Party Chair presides over meetings of the Executive Committee, National Committee, and National Conventions. Art. VIII, § 2(a). The Party's constitution provides that the Vice Chair shall serve as the National Party Chair in the Chair's absence. Art. VIII, § 2(b). The Party's Secretary performs many functions, including recording the proceedings of all meetings and providing official notice of all meetings of the Executive and National Committees and the National Convention. Art. VIII, § 2(c). Any National Officer may be removed by a two-thirds roll call vote of the registered members of the National Committee. Art. VIII, § 6(a). The four National Party Officers, along with seven regional representatives, comprise the Executive Committee. Art. V, § 2.

7. A Reform Party National Convention was held on July 23-25, 1999, in Dearborn, Michigan. The Dearborn Convention elected John J. Gargan to succeed Russell Verney as National Party Chair and Ronn Young to succeed Michael Morris as National Treasurer, both effective January 1, 2000. In addition, the Dearborn Convention elected Gerry Moan and Jim Mangia to serve as National Party Vice Chair and Secretary, respectively.

8. A National Committee Meeting was held immediately before the Dearborn Convention on July 23, 1999. At the National Committee Meeting, Sue Harris DeBauche (wife of Ronn Young) made a motion "that in the future a national committee agenda for the meeting be published 30 days prior to the meeting." The motion passed.

9. An Executive Committee meeting was convened on September 1, 1999, during which the committee elected to hold the Party's 2000 Nominating Convention in Long Beach, California rather than St. Paul, Minnesota. The convention site was chosen by a two-thirds majority vote of the eleven-member Executive Committee. However, the Long Beach site only received a passing two-thirds majority after two previous and unsuccessful votes. Also at that meeting, Young was unanimously appointed Chair and Treasurer (hereinafter

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"Chair/Treasurer") of the Party's 2000 Convention Committee, a special committee of the Reform Party formed to carry out the business of effectuating plans for the Reform Party's 2000 Presidential Nomination Convention (hereinafter "2000 Nominating Convention"). Under the Reform Party constitution, the chair of a special committee (such as the...