Excerpts from the Olympia Food Co-op lawsuit dismissal

The courtroom on the day of the first hearing, February 23. (Photo: Maya Harris)

On February 27, Judge Thomas McPhee of Thurston County Superior Court dismissed the anti-BDS lawsuit against the Olympia Food Co-op, accepting the defendants’ motion that the lawsuit violated Washington State’s anti-SLAPP law.

The official transcript of the February 27 hearing is available as a PDF.

I have excerpted some of Judge McPhee’s key findings below, and you can jump to particular topics from here:

1. The Co-op’s boycott constitutes free speech in connection with an issue of public concern, namely the Palestine/Israel conflict.

2. The boycott was enacted lawfully according to Co-op bylaws.

3. BDS is a nationally recognized movement.

4. The boycott was considered by the Co-op board only after other avenues in the formal process were exhausted.

5. The anti-SLAPP statute is constitutional.

6. Case dismissed, plaintiffs to be fined.

7. A recommendation to settle the dispute with a vote.

Also: a report on the plaintiffs’ refusal to bring the matter to a vote.

Another view from the courtroom, February 23. (Photo: TESC Divest!)

1. The Co-op’s boycott constitutes free speech in connection with an issue of public concern, namely the Palestine/Israel conflict.

Here, Judge McPhee considers whether the Co-op’s boycott of Israeli goods constitutes free speech that is protected under Washington State’s anti-SLAPP statute—section 4.24.525 of the Revised Code of Washington.

As you know, § .525 contains two prongs. First, the focus is on the defendants, the persons bringing the motion seeking dismissal of the lawsuit. Under the first prong, the defendants must show that they are protected by § .525 under (2)(e) … defining an action involving public participation and petition. And you recall that that language is that “any other lawful conduct in the furtherance of the exercise of a constitutional right of free speech in connection with an issue of public concern or in furtherance of the exercise of the constitutional right of petition.”

Defendants here must show by a preponderance of the evidence that their conduct fits this definition.

I find that they have done so. Four decades of conflict in the Middle East have accompanied the issues that surround the purposes behind this proposed Boycott and Divestment Resolution. The conflict in the Middle East between Israel and its neighbors has certainly gone on longer than that, but focusing on the conflict between the Palestinians and the Israelis over the occupation of land is at least four decades old. And for four decades, the matter has been a matter of public concern in America and debate about America’s role in resolving that conflict. I don’t believe there can be any dispute about that issue being a matter of public concern.

2. The boycott was enacted lawfully according to Co-op bylaws.

In order to conceal the SLAPP nature of the lawsuit, the plaintiffs had focused on the process by which the boycott passed, rather than on their opposition to the boycott itself.

Here, Judge McPhee determines whether such a focus was plausible enough to have the likelihood of prevailing. First, he acknowledges that the Co-op board approved the Israel boycott proposal by consensus.

In their brief, plaintiffs contend that they don’t dispute defendants’ right to speak on this important subject. But they object to the improper way that the defendants have used the corporation to voice their speech…

[R]ecall the language of the statute itself. It begins, in that subpart (e), “any lawful conduct.” And it is here that the plaintiffs contend that the conduct in enacting the resolution was not lawful. Therefore, the analysis shifts to the second prong of the statute, where plaintiffs must prove by clear and convincing evidence a probability of prevailing on the claim.

[…]

So what evidence do the plaintiffs offer to meet their burden on this second prong? First, the issue of consensus. The governing documents of the corporation, the Co-op here, is very clear.

Decisions of the Board must be by consensus. That is not so for the membership nor is it so for the staff.

There is no requirement that either of those bodies act by consensus that is contained in the bylaws of the corporation.

This issue of consensus is a very important part of the fabric of the Co-op, but it is not material to this case. Census means many different things, but it can, and does in this case, mean the unanimous consent among decision-makers. Here, unanimity is not the issue.

It is undisputed that there was no consensus among the staff in addressing this Boycott and Divestment Resolution. And we know that while the bylaws do not require consensus for the staff to act, the Boycott Policy certainly does. But we know that they didn’t reach consensus there. We know that the Board did reach consensus. There is no dispute about that.

The issue is, Did the Board have authority to make a decision, to pass, or to use the language of the Co-op, to “consent to” the Boycott and Divestment Resolution of July 15, 2010. In the words of the statute, was the Board’s conduct lawful. And whether they acted with consensus or not is not material to that issue, because there is no dispute they did act with consensus towards that issue.

Then he addresses whether the board had authority to approve the boycott proposal, and finds that according to the Co-op’s bylaws, it does.

Next we deal with the key issue here, and that is what is the authority of the Board to act in this matter. As a matter of law, the Olympia Food Co-op was organized as a nonprofit corporation and remains a nonprofit corporation under the law. Under our law, the governance documents of the Co-op are its articles of incorporation and bylaws. Under our law, “The affairs of a corporation shall be managed by a board of directors.”

The Co-op’s governance documents, the bylaws, repeat the statute, “The affairs of the cooperative shall be managed by a Board of Directors.”

It is equally clear that under our law a board of directors of a nonprofit corporation may delegate some of its powers. In this case the Co-op’s Board has done so with respect to the Boycott Policy. The Boycott Policy, consented to by the Board in 1993, has its operative language in paragraph 5 where the policy declares, “The Department manager will make a written recommendation to the staff who will decide by census whether or not to honor a boycott.”

The policy is silent about the consequences of staff failing to reach consensus to either honor the boycott or to not honor the boycott.

Plaintiffs contend that where the staff does not reach consensus to honor a boycott, the matter simply ends, and the boycott is not honored. Plaintiffs contend that the delegation in the Boycott Policy is a complete delegation of that power and that the Board did not retain any power to decide boycott requests, even where consensus was not reached by the staff one way or the other.

The Boycott Policy does not explicitly support these contentions. It speaks to consensus one way or the other but not the failure to reach consensus.

For the plaintiffs, the Boycott Policy is at best ambiguous about failing to reach consensus. To explain the intent of the Board in 1993 regarding this issue, plaintiffs offer the identical declarations of two Board members at the time, to the effect that “authority to recognize boycotts would reside with the Co-op staff, not the Board.”

Above, McPhee references sworn declarations by plaintiff Susan Trinin and by Tibor Breuer, both of whom served on the Co-op board in the early 1990s.

Breuer, who is not a plaintiff, appeared in the awkward StandWithUs anti-BDS video with four of the plaintiffs, where he compared BDS to a clenched fist:

Tibor Breuer: “BDS is this!”

Judge McPhee was not swayed by Trinin’s and Breuer’s claims of how they, as former board members, would have treated an Israel boycott proposal:

Whatever the standard for weighing evidence in a motion such as this, the evidence must be evidence admissible under the rules of evidence in case law.

The statements of the two declarants are inadmissible as expressions of their subjective intents at the time the policy was enacted. As statements of intent of the Board, they are inadmissible as hearsay.

The only objective evidence specifically relating to this issue is in the Board minutes from July 28, 1992, almost a year before the policy was finally adopted. The formal proposal there is stated as, “If a boycott is to be called, it should be done by consensus of the staff.”

Consideration of the entire section of the minutes relating to boycotts from this meeting shows that the focus is on resolving, by policy, whether individual managers or the staff would decide boycott requests.

And in the minutes, just above the formal proposal is the statement, “BOD,” or board of directors, “can discuss if they take issue with a particular decision.”

The enumerated powers of the Board contained in the bylaws includes, at No. 16, “Resolve organizational conflicts after all other avenues of resolution have been exhausted.”

Plaintiffs have offered no evidence that the Board exempted boycott matters from this power, certainly not evidence that could be considered clear and convincing.

3. BDS is a nationally recognized movement.

Here the judge addresses another strange argument offered by the plaintiffs. Because the Co-op’s boycott policy seeks to honor “nationally recognized boycotts,” the plaintiffs attempted to narrow the definition of what constituted a “nationally recognized boycott” in order to claim that the BDS movement did not fit that requirement.

The next argument that the plaintiffs make is on the issue of nationally recognized boycott. The plaintiffs make three contentions in this regard.

First, plaintiffs contend that if the Board did have the power to resolve the deadlock on the boycott, the Boycott and Divestment Resolution of July 15, 2010, was unlawful because the Board failed to determine that the matter was a nationally recognized boycott.

In fact, the plaintiffs argued that the BDS movement was “internationally recognized,” but not “nationally recognized.”

Jon Haber: “Divest this!”

They also claimed that according to the Co-op’s boycott policy, BDS could not be nationally recognized if no other food co-op in the US was publicly honoring the boycott call. This contradicted the intended meaning of the boycott policy, according to its drafter, who was one of the defendants in the lawsuit.

Finally, the plaintiffs submitted a sworn declaration by self-proclaimed BDS expert Jon Haber, who asserted that BDS was definitely not “nationally recognized.”

Haber, who lives in Lexington, Massachusetts, runs the Divest This! blog, a blog dedicated to talking about how BDS is not worth talking about. His blog reports on BDS activities nationally.

Haber’s writings are replete with conspiracy theories, circular logic, and complete falsehoods. Thus his sworn declaration fit in nicely with the rest of the plaintiffs’ legal briefs.

Two months before submitting his declaration, Haber explained with impeccable illogic why BDS could not be considered nationally recognized:

For example, if you look at this picture [below], most of your will “recognize” it as one of Sponge Bob Square Pants. But that’s a long way from claiming that since you “recognize” this character, that means you must “recognize” him as King of the High Seas, the CEO of General Motors or the Pope.

SpongeBob SquarePants: “Recognize this!”

Unfortunately for the plaintiffs, Haber’s “expert” testimony failed to win over the judge:

[The plaintiffs] argue that the Boycott and Divestment Resolution does not reflect a national boycott. Their evidence is not sufficient to meet the clear and convincing standard, nor is it sufficient to even create a material issue of fact. I will be more direct in this regard. The evidence clearly shows that the Israel boycott and divestment movement is a national movement. It is clearly more than a boycott. It is a divestment movement, as well.

The question of its national scope is not determined by the degree of acceptance. There appears to be very limited acceptance, at least in the United States. Further, in arguing that the movement has achieved little success, plaintiffs offer examples that demonstrate the national scope of the issue. Plaintiffs argue that the movement has not penetrated the retail grocery business, but that does not determine national scope. The assistance to each side here from national organizations organized to support or oppose the movement demonstrates its national scope.

In other words, just the fact that there is organized national opposition to BDS is enough to imply national recognition of BDS.

The plaintiffs also argued that the issue of national recognition was not addressed when the board considered the boycott:

Next plaintiffs contend that even if the movement is national in scope, the Board did not address that issue in its resolution of June 15, 2010. The only evidence offered is that the staff, in its discussion, never reached that aspect of the proposal. This contention is refuted by documentary evidence that is clear contravention of the plaintiffs’ contention.

The minutes of the Board meeting of May 20, 2010, show that a presentation was made to the Board regarding the boycott proposal that included presentation of, “The nationally and internationally recognized boycott.” I’m quoting there from the minutes of the meeting.

At the meeting the Board decided to resubmit the matter to staff with the direction to Harry Levine to “write a Boycott Proposal following the outlined process.” I construe “outlined process” to mean the process outlined in the Boycott Policy, because that is the format that Mr. Levine followed. In his lengthy paper dated June 7, 2010, Mr. Levine included a section entitled “A growing movement for Boycott, Divestment, Sanctions (BDS),” and following that section a section entitled “Prominent Supporters.”

The minutes of the Board meeting of July 15, 2010, state that Harry shared with the group the summary of staff feedback and the process therein arising out of the submission to staff. This record clearly reflects that the scope of the movement or boycott was addressed; plaintiffs offer only vague rebuttal, not clear and convincing evidence.

4. The boycott was considered by the Co-op board only after other avenues in the formal process were exhausted.

McPhee then addressed another contention of policy violation asserted by the plaintiffs:

Finally, plaintiffs contend that the Board acted in contravention of its powers granted it under the bylaws to “Resolve organizational conflicts after all other avenues of resolution have been exhausted.”

Plaintiffs contend that the Board did not exhaust other avenues before it acted. Plaintiffs offer two avenues, first vote of the membership, or second, education of the membership. This is not clear and convincing evidence.

The avenues suggested by plaintiffs are not in the Co-op’s scheme for resolving boycott requests. The scheme was for staff consideration first, as authorized by the Boycott Policy, and if necessary, followed by Board consideration in resolution of organizational conflicts as authorized in the bylaws.

The record shows that the Board resubmitted the matter to staff first and then acted when that avenue proved a dead end. The record shows that the Board considered further delay, reviewed the history of the proposal, and balanced the need for completion against further delay. That evidence is not disputed.

Thus McPhee ruled that the requirements of the anti-SLAPP motion had been met:

In sum, I conclude that defendants have satisfied their burden under the first prong of § .525 and now conclude that plaintiffs have failed in their burden under the section prong. In so doing, I have addressed the substance of plaintiffs’ complaint. I have not addressed other contentions made by defendants, because I did not have to in order to decide this matter.

5. The anti-SLAPP statute is constitutional.

The plaintiffs argued that the SLAPP motion could not apply because the Washington State anti-SLAPP statute was unconstitutional. The plaintiffs’ reasoning and the judge’s responses exceed the scope of this article, and therefore I can only direct readers both to the plaintiffs’ opposition to the motion (specifically pages 7–12) and the portion of the transcript that addresses the judge’s findings (pages 27–32).

Judge McPhee stated that a challenge to “the constitutionality of a statute enacted by Legislature” would require the plaintiffs to “overcome that presumption by evidence beyond a reasonable doubt,” which the plaintiffs failed to do on all its points.

6. Case dismissed, plaintiffs to be fined.

Here, McPhee dictates the penalties that the anti-SLAPP law mandates, although the actual order will await a later date.

That concludes my opinion here. The result is that I am prepared to dismiss the lawsuit of the plaintiffs. Concurrently with that, I will be required to enter orders awarding to the defendants attorneys’ fees and a penalty of $10,000 per defendant against the plaintiffs. I don’t decide at this point that the statute requires a separate $10,000 award to each defendant. I will decide that if there is an issue about it as we move forward.

But I do note that a federal court, Judge Pechman in the [Castello v.] City of Seattle case, issued such a ruling.

7. Judge McPhee recommends settling the dispute with a vote.

McPhee concluded the hearing with a recommendation to settle the dispute outside of the court system:

I am struck in this case by some aspects of this lawsuit that I think it is appropriate for the citizens of this community to consider.

The Olympia Food Co-op is an institution in this community. It has existed for a long time and presumably will continue to exist for a long time.

This case and this process that we’ve gone through will move forward and will be resolved, ultimately, in our Court of Appeals, I suspect.

What will be resolved is not the underlying dispute which brings so many of the citizens here today to observe, but rather, the dry and technical application of the statute. However it is resolved, it will be a long and expensive process. And as I indicated, there are considerable sums of money now at issue in this case that were not necessarily present before and have nothing to do with the issue of whether this is an appropriate boycott for the Co-op to undertake or not.

I express absolutely no opinion in that regard.

But it does occur to me that whatever the final decision in this case is, whether it is this decision or whether it is determined that I have made a mistake and the case should move forward to an ultimate resolution either that the Board acted correctly or not—whatever that decision is down the road, after a considerable period of time and resources are invested in it, that decision can be overturned very quickly and very simply, simply by a vote of the membership of the cooperative.

Nothing here that is decided in terms of deciding the course of the Co-op is cast in stone. And given this state of the case, where we have a judicial determination about the merits of the SLAPP motion, but some time before that order is entered and becomes appealable, I urge that the parties consider resolution of this case something short of the type of order that will be entered at the end of this case. It would seem to me that it is in the best interests of all parties, and I urge your consideration of that view and that proposal.

That is not a process that I can order. It is not a process that I will be involved in. But the interests of the citizenry in this case, as evidenced by the number of people who have appeared here, seems to suggest that that is a matter for their concern; and there is an avenue of resolution here short of the type of order that I am required by law, now that I have made my decision, to enter and which will be reviewed.

In other words, the judge recommended the same remedy that has been suggested for almost two years by boycott supporters and by the Co-op board, but which has been rejected by the plaintiffs and the rest of the organized opposition in Olympia: a member-wide vote.

Judge McPhee also noted that this was a case of great concern to the public, “as evidenced by the number of people who have appeared here.” On that day, the courtroom had maxed out the occupancy at 49, with several people waiting to get in. According to witnesses, Co-op supporters appeared to outnumber opponents 10 to 1.

Co-op supporters outside the Thurston County Courthouse in the early morning of February 23. (Photo: TESC Divest!)

The plaintiffs’ refusal to bring the matter to a member-wide vote

I have previously written about how the boycott opposition, including the plaintiffs, at one point claimed to be pursuing a member-initiated ballot to rescind the Israel boycott, only to later reject the option and instead demand an unconditional repeal of the boycott.

The most likely reason for this is that they recognize they would lose the vote. Losing the vote would both solidify the popular mandate for the boycott and also demonstrate that the boycott opposition does not represent the Co-op community, despite repeated claims.

Prior to the filing of the lawsuit, the Co-op board had suggested to the plaintiffs that the option of a member-initiated ballot was still available.

The response from the plaintiffs’ lawyers on July 15, 2011 (see Exhibit Y) was unequivocal:

You propose as an alternative to litigation that our clients avail themselves of “the member-initiated ballot process.” This suggestion is not well taken. It is the Board that failed to follow the procedural rules, and it is the Board’s responsibility to take remedial action. It is neither fair nor justified to impose on our clients the burden of correcting errors that were not of their making. Doing so would be tantamount to admitting the Israel Boycott and Divestment policies resulted from legitimate Board action, as opposed to procedural unfairness and disregard for the rules and principles of OFC [the Olympia Food Co-op]. Our clients are responsible for neither the Board’s original misconduct nor its ongoing refusal to take remedial action. They therefore respectfully refuse to take up your proposal.

In other words, the plaintiffs claimed that they were not obligated to exhaust all alternatives to a lawsuit and therefore would not do so. Contrast this with an earlier May 31, 2011 letter (see Exhibit A) to the Co-op by the plaintiffs:

That said, our informal efforts thus far—made in the spirit of cooperation that drew us to OFC in the first place—have failed to persuade you to do what is required under the circumstances.

Here they claimed to have been cooperative and respectful of Co-op bylaws. At the same time, they admitted that all their efforts prior to the lawsuit had been “informal.” Additionally:

At this point, we are left no choice but to demand in no uncertain terms that OFC act in accordance with its rules and bylaws and rescind the Israel Boycott and Divestment policies.

Note here that they claimed they were “left no choice,” meaning the lawsuit was a result of having no alternatives for redress. Yet in the subsequent July 15 letter, they stated that they chose not to pursue alternative forms of redress.

And finally, in light of the judge’s rulings, we should revisit this statement, also from the plaintiffs’ May 31 letter:

Should new proposals to enact such policies be pursued at a later date in accordance with OFC rules and regulations, we would be prepared to respect the outcome of that process.

Thus comes the key question: Since the court, which the plaintiffs sought for arbitration, has determined that the boycott was indeed passed “in accordance with OFC rules and regulations,” are they now “prepared to respect” the outcome?

I think we already know the answer.

There is much more to the story of this lawsuit, which I will address in time.