Motion for Leave to File Second Amended Answer (P0325875)

IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF CLACKAMAS

7 TIM REEVES, ERIC SAUB, GREGBURNETT, CARLA PEALER, as the

8 LIBERTARIAN PARTY OFOREGON, and DAVID TERRY, M

9 CARLING, and RICHARD BURKE,as Members of the LIBERTARIAN

10 PARTY OF OREGON,

Plaintiffs,

12 vs.

13 WES WAGNER, HARRY JOKTABOR, MARK VETANKN,

14 BRUCE KNIGHT, JEFF WKSTON,JIM KARLOCK, RICHARD

15 SKYBA, individuals andLIBERTARIAN PARTY OF

16 OREGON,

Case No. CV 12010345

DEFENDANT LIBERTARIANPARTY OF OREGON'SMOTION FOR LEAVE TOFILE SECOND AMENDEDANSWER, AFFIRMATIVEDEFENSES, ANDCOUNTERCLAIMS

17

18

19

De fendants.

CERTIFICATE OF COMPLIANCE

20 Pursuant to UTCR 5.010, the undersigned certifies that he conferred with

plaintiffs'ounsel concerning the subject of this motion and they were unable to

reach agreement. Plaintiffs'ounsel has stated that plaintiffs will oppose the

motion.

24 ///

///

26 ///

HARRANG LONG GARY

RUDNICK P C1001 SW Fifth Avenue

16th Floor

Portland, OR 97204-1116Phone 503 242 0000

Fax 503 241 1456

Page 1 —DEFENDANT LIBERTARIAN PARTY OF OREGON'S MOTIONFOR LEAVE TO FILE SECOND AMENDED ANSWER,AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS

MOTION

2Defendant Libertarian Party of Oregon {"Defendant LPO") moves the court

3for an order pursuant to ORCP 23A granting leave to file a Second Amended

4Answer, Affirmative Defenses, and Counterclaims, in the form attached as

5

Exhibit 1 to this motion. The amendment adds a demand for attorney fees, the6

entitlement to which has become clearer during discovery and in the course of7

preparing summary judgment motions.8

POINTS AND AUTHORITIKS

10Defendant LPO seeks leave to amend its complaint to allege a claim of

attorney fees against plaintiffs pursuant to ORS 20.105. Leave shall be freely12

given when justice so requires, ORCP 23A. A trial judge has broad discretion in13

determining when justice requires leave to amend. Jackson County v, Jackson14

Education Service District, 90 Or App 299, 752 P2d 1224 {1988).Justice requires15

allowing Defendant LPO's proposed amendments to assert a counterclaim for16

attorney fees under ORS 20.105, where the opposing party had "no objectively17

reasonable basis" for asserting a claim.18

Plaintiffs assert a claim to enforce the bylaws of the Libertarian Party of19

Oregon, Compl. at $$ 4, 7, 16, and 35. As described in greater detail in Defendant20

LPO's Motion for Summary Judgment, parties in privity with plaintiffs have21

previously litigated the issue of whether an Oregon court can force leaders of the22

LPO to comply with party bylaws. See Defendant LPO's Motions for Summary23

Judgment at 20—26 and documents cited therein. In the previous case, the24

Washington County Circuit Court ruled that courts cannot enforce LPO bylaws.25

Id. For that reason, Defendant LPO asserts that plaintiffs had no objectively26

HARRANG LONG GARY

RU0NICK P.C1001 SW Fifth Avenue

16th FloorPortland, OR 97204-1 116

Phone 503 242 0000Fax 503 241 1458

Page 2 — DEFENDANT LIBERTARIAN PARTY OF OREGON'S MOTIONFOR LEAVE TO FILE SECOND AMENDED ANSWER,AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS

reasonable basis for asserting a claim to enforce LPO bylaws, Cf. Secor

2 Investments, LLC v. Anderegg, 188 Or App 154, 175, 71 P3d 538, 550 (2003)

3 (ruling that there was no objectively reasonably basis to prosecute claim because

4 of claim preclusion).

5 Defendant raised an affirmative defense of issue preclusion in its original

and amended answers, stating that "[t]he Washington County Circuit Court

entered a final judgment in Wagner v. Libertarian Party of Oregon, case no.

8 C064544CV, determining that the First Amendment to the United States

9 Constitution bars courts from ordering leaders of the Libertarian Party of Oregon

10 to comply with party bylaws." Defendant LPO's Answer tt 46; Defendant LPO's

11 Amended Answer tt 46. In the course of discovery, Defendant LPO obtained a

12 copy of the court record in the Washington County Circuit Court case.

13 Declaration of C, Robert Steringer in Support of Defendant LPO's Motion for

14 Leave to File Second Amended Answer, Affirmative Defenses, and Counterclaims

15 ("Steringer Decl.") tt 2. That record reveals the extent to which Plaintiff Burke,

16 the LPO and LPO members previously litigated the issue of whether a court could

17 order leaders of the LPO to comply with party bylaws. See Defendant LPO's

18 Motions for Summary Judgment at 20—26; Declaration of Wes Wagner in Support

19 of Defendant LPO's Motions for Summary Judgment, Exs. 29-35. Counsel for

20 Defendant LPO mailed a copy of the Washington County Circuit Court case

21 record to plaintiffs'ounsel on January 15, 2013. Steringer Decl. tt 3.

22 Oregon courts recognize that "a claim that was objectively reasonable when

23 asserted may become unreasonable when viewed in light of additional evidence *

24 ~ ~,"Dimeo v. Gesik, 197 Or App 560, 562, 106 P3d 697 (2005); see also

25 McCarthy v. Or. Freeze Dry, Inc., 334 Or 77, 84, 46 P3d 721 (2002) (suggesting

26 that a party may be entitled to attorney fees under ORS 20.105 if the opposing

HARRANG LONG GARY

RUDNICK P,C1001 SW Fifth Avenue

16th Floor


Fax 503 241 1456

Page 3 —DEFENDANT LIBERTARIAN PARTY OF OREGON'S MOTIONFOR LEAVE TO FILE SECOND AMENDED ANSWER,AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS

party continues to litigate a claim after the claim clearly becomes meritless). The

2 Oregon Court of Appeals has stated that "a party has a continuing duty to evaluate

3 its position throughout the course of litigation." Dimeo, 197 Or App at 562.

4 Plaintiffs have failed to dismiss their complaint notwithstanding theparties'ecovery

of the record from the Washington County Circuit Court case. It is

6 appropriate for Defendant LPO to assert the attorney fees claim in an amended

7 pleading, and for the court to allow the amendment necessary to do so,

8 Defendant LPO respectfully requests that the Court grant its motion to file

9 the Second Amended Answer, Affirmative Defenses, and Counterclaims.

10

12

DATED this 25th day of March, 2013.

HARRANG LONG GARY RUDNICK P.C.

13

14

15

16

17

tty: (C. Robert Steringer, OS ¹983514bob.steringer(harrang. omJohn C, Rake, OSB ¹105808i ohn.rakeAa,harrang.corn

Telephone: 503.242.0000Facsimile: 503.241.1458

19

20

21

Of Attorneys for Defendant,Libertarian Party of Oregon

Trial Attorney: C, Robert Steringer

22

23

24

25

26

HARRANG LONG GARY

RUDNIDK P C1001 SW Fifth Avenue

16th Floor

Portland, OR 97204-1 116Phone 503 242 0000

Fax 503 241 1456

Page 4 —DEFENDANT LIBERTARIAN PARTY OF ORECON'S MOTIONFOR LEAVE TO FILE SECOND AMENDED ANSWER,AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS

IN THE CIRCUIT COURT OF THE STATE OF OREGON

FOR THE COUNTY OF CLACKAMAS

7 TIM REEVES, ERIC SAUB, GREGBURNETT, CARLA PEALKR, as the

8 LIBERTARIAN PARTY OFOREGON, and DAVID TERRY, M

9 CARLING, and RICHARD BURKE,as Members of the LIBERTARIAN

10 PARTY OF OREGON,

Plaintiffs,

12 vs.

13 WES WAGNER, HARRY JOETABOR, MARK VETANEN,

14 BRUCE KNIGHT, JEFF WESTON,JIM KARLOCK, RICHARD

15 SKYBA, JOSEPH SHELLEY,individuals and LIBERTARIAN

16 PARTY OF OREGON,

Case No. CV 12010345

DEFENDANT LIBERTARIANPARTY OF OREGON'SSECOND AMENDEDANSWER, AFFIRMATIVEDEFENSES, ANDCOUNTERCLAIMS

17 Defendants.

19 Defendant Libertarian Party of Oregon ("LPO") answers plaintiffs'econd

20 Amended Complaint as follows:

21

22 LPO admits that Plaintiffs Reeves and Burnett were registered voters

23 affiliated with the Libertarian Party at certain times, denies that Plaintiffs Reeves

24 and Burnett were members of the LPO under the 2009 Bylaws at all relevant times

25 but admits that Plaintiffs Reeves and Burnett were at certain times members of the

26 LPO under the LPO Bylaws adopted by the LPO State Committee on March 31,

HARRANG LONG GARY

RUDNICKP C1001 SW Fifth Avenue

16th Floor


Fax 503 241 1458

Page I —DEFENDANT LIBERTARIAN PARTY OF OREGON'S SECONDAMENDED ANSWER, AFFIRMATIVE DEFENSES, ANDCOUNTERCLAIMS

EXHIBIT 1Page 1

1 2011, and subsequently ratified by a vote of Libertarian Party voters (the "2011

2 Bylaws"). LPO otherwise denies theallegations in paragraph l. LPO

3 affirmatively alleges for the sake of clarity that Plaintiffs Reeves'nd Burnett's

4 status as dues-paying members of the LPO had lapsed prior to their

5 commencement of this action; that Plaintiff Burnett was registered as a Republican

6 voter from October 4, 2004, until April 23, 2010, and as an Independent voter

7 from April 23, 2010, until May 26, 2011; and that Reeves was registered as a

8 Republican voter from April 24, 2012, until June 5, 2012,

10 LPO admits that Plaintiff Reeves was a registered voter affiliated with the

11 Libertarian Party at certain times and a resident of Oregon at all relevant times,

12 denies that Plaintiff Reeves was a member of the LPO under either the 2009 or

13 2011 Bylaws at all relevant times, and otherwise denies the allegations in

14 paragraph 2,

15

16 LPO admits that Plaintiff Terry attended the LPO State Committee meeting

17 held on March 31, 2011, denies that Plaintiff Terry was a member of the LPO

18 under either the 2009 Bylaws or the 2011 Bylaws at all relevant times, and

19 otherwise denies the allegations in paragraph 3. LPO affirmatively alleges for the

20 sake of clarity that Plaintiff Terry objected to the nature of the business being

21 considered at the meeting held on March 31, 2011, but left the meeting before

22 making any formal objection to the adoption of the 2011 Bylaws. LPO further

23 affirmatively alleges for the sake of clarity that Plaintiff Terry's status as a dues-

24 paying member of the LPO had lapsed and was not renewed prior to the March 31,

25 2011, LPO State Committee meeting and before his commencement of this action

26 and that Plaintiff Terry is currently registered as a Republican voter.

HARRANG LONG GARY

RUDNICK P C.1001 SW Fifth Avenue

16th FloorPortland, OR 97204-1116

Phone 503 242 0000Fax 503 241 1458

Page 2 —DEFENDANT LIBERTARIAN PARTY OF OREGON'S SECONDAMENDED ANSWER, AFFIRMATIVE DEFENSES, ANDCOUNTERCLAIMS

EXHIBIT 1Page 2

2 LPO admits that Plaintiffs Burnett, Saub and Pealer were registered voters

3 affiliated with the Libertarian Party at certain times, denies that Plaintiffs Saub and

4 Pealer were members of the LPO under the 2009 Bylaws at all relevant times but

5 admits that Plaintiffs Reeves and Burnett were at certain times members of the

6 LPO under the 2011 Bylaws, admits that Plaintiff Burnett has not been given

7 control of the assets of the LPO, and otherwise denies the allegations in paragraph

8 4. LPO affirmatively alleges for the sake of clarity that Plaintiffs Saub's and

9 Pealer's status as dues-paying members of the LPO had lapsed and was not

10 renewed prior to the commencement of this action; that Plaintiff Saub was

11 registered as a Republican voter from April 12, 2004, until May 23, 2011, and

12 from June 7, 2011, until October 4, 2011; and that Plaintiff Burnett was registered

13 as a Republican voter from October 4, 2004, until April 23, 2010, and as an

14 Independent voter from April 23, 2010, until May 26, 2011.

15

16 LPO admits that Richard Burke was a registered voter affiliated with the

17 Libertarian Party and a resident of Oregon, denies that Plaintiffs Burke and

18 Carling were members of the LPO under the 2009 Bylaws at all relevant times but

19 admits that Plaintiff Burke was at all relevant times a member of the LPO under

20 the 2011 Bylaws, and otherwise denies the allegations of paragraph 5. LPO

21 affirmatively alleges for the sake of clarity that Plaintiffs Burke's and Carling's

22 status as dues-paying members of the LPO had lapsed and was not renewed prior

23 to the commencement of this action.

24

25 LPO admits that the Libertarian National Committee ("LNC") is a national

26 political organization with state affiliates around the United States, that LNC

HARRANG LONG GARY

RUONICKP C1001 SW Fifth Avenue

16th Floor


Fax 503 241 1458


EXHIBIT 1Page 3

1 claims a trademark on the words "Libertarian Party," and that the LPO is affiliated

2 with the LNC, LPO denies the remaining allegations either on the facts or because

3 they are conclusions of law not requiring an answer.

5 LPO admits that Wes Wagner resides in Clackamas County, that Wagner is

6 the chairperson of the LPO as recognized by the Oregon Secretary of State

7 Elections Division, and that Wagner moved to dismiss earlier actions brought by

8 some of plaintiffs against Wagner that failed to name other officers of the LPO,

9 LPO denies the remaining allegations in paragraph 7 either on the facts or because

10 they are conclusions of law not requiring an answer.

12 LPO denies the allegations in paragraph 8 either on the facts or because

13 they are conclusions of law not requiring an answer,

15 LPO admits that its bylaws were amended at the 2009 State Convention in

16 Newport, Oregon on March 4 and 15, 2009, that the document attached as Exhibit

17 1 to the Plaintiffs'econd Amended Complaint likely is an accurate reflection of

18 relevant provisions of the 2009 Bylaws, and denies the allegations of paragraph 9.

19 LPO affirmatively alleges for the sake of clarity that the document attached as

20 Exhibit 1 is not consistent in all respects with the minutes from the 2009 State

21 Convention in Newport and may not have been properly authenticated.

22 10.

23 In response to paragraph 10, LPO incorporates its answer to paragraph 9 of

24 plaintiffs'econd Amended Complaint. LPO admits that Wagner served as an

25 officer of the LPO under the 2009 Bylaws, admits that the 2009 Bylaws provide

HARRANG LONG GARY

RU0 NICK P.C.1001 SW Fifth Avenue

16th Floor


Fax 503 241 1456


EXHIBIT 1Page 4

1 an amendment procedure in Article XVI as quoted in paragraph 10, and denies the

2 remaining allegations either on the facts or because they are conclusions of law.

4 In response to paragraph 11,LPO incorporates its answer to paragraph 9 of

5 plaintiffs'econd Amended Complaint.

12.


8 plaintiffs'econd Amended Complaint,

13,


11 plaintiffs'econd Amended Complaint..

12 14.

13 LPO admits that the LPO convened for a properly-noticed annual

14 convention on March 12, 2011, and that the attendants determined that they did

15 not reach a quorum. LPO admits that then-Vice Chairperson Wes Wagner moved

16 to continue the meeting to May 28, 2011, and Wagner's motion was approved

17 after being amended to continue the meeting to May 21, 2011. LPO admits that

18 then-Chairperson Jeff Weston explained at that convention that under the 2009

19 Bylaws if Mr. Wagner's motion to adjourn passed, the term of office of the

20 existing officers would end "at the end of the convention in May." LPO

21 affirmatively alleges for the sake of clarity that Weston's statement that existing

22 officers'erms would end at the end of the convention was predicated on the

23 occurrence of an election of new officers by the LPO membership at the

24 convention in May. LPO admits that Weston resigned shortly after the March 12,

25 2011, meeting and Wagner assumed the position of Chairperson of the LPO, but

26

HARRANG LONG GARY

RUGNICKP C1001 SW Fifth Avenue

16th Floor

Pui lie nd, OR 97204-1 116Phone 503 242 0000

Fax 503 241 1456

Page 5 — DEFENDANT LIBERTARIAN PARTY OF ORECON'S SECONDAMENDED ANSWER, AFFIRMATIVE DEFENSES, ANDCOIJNTERCLAIMS

EXHIBIT j.Page 5

1 LPO denies the remaining allegations either on the facts or because they are

2 conclusions of law not requiring an answer.

15.

4 LPO admits that Jeff Weston resigned from his position as Chairperson and

5 Wagner, as Vice Chair, automatically assumed the role of Chairperson. LPO

6 denies the remaining allegations either on the facts or because they are conclusions

7 of law not requiring an answer.

16.


10 plaintiffs'econd Amended Complaint, LPO admits that Wagner held a properly-

11 noticed meeting of the LPO State Committee on March 31, 2011; that meeting

12 minutes indicate thirteen individuals attended; and that the State Committee

13 adopted a new constitution and bylaws (the "2011Bylaws") and appointed Angela

14 Grover, Richard Skyba, Harry Joe Tabor, Ron Bream, Mark Vetanen, Wes

15 Wagner, Jim Karlock, Joe Shelley and Herb Booth to the Board of Directors

16 contemplated by the new bylaws. LPO denies that the State Committee appointed

17 Wes Wagner as Chair, Harry Joe Tabor as Vice Chair, Mark Vetanen as Treasurer,

18 and Bruce Knight as Secretary at that time; but admits they were appointed by the

19 Board of Directors at a later date. LPO denies the remaining allegations either on

20 the facts or because they are conclusions of law not requiring an answer.

21 17.


23 plaintiffs'econd Amended Complaint. LPO denies that Wagner acknowledged

24 that a 2/3 vote at a convention was required to change the 2009 bylaws but admits

25 the remainder of the allegations in paragraph 17.

26 ///

HARRANG LONG GARY


16th FloorPottland, OR 97204-1116

Phone 503 242 0000Fax 503 241 1458


EXHIBIT 1Page 6

2 LPO denies the allegations of paragraph 18 either on the facts or because

3 they are conclusions of law not requiring an answer,

19.

5 LPO admits that Wagner filed the newly adopted bylaws and reported new

6 Officers to the Oregon Secretary of State in April, but LPO denies the remainder

7 of allegations in paragraph 19 on the facts or because they are conclusions of law

8 not requiring an answer.

20.

10 LPO admits that Wes Wagner filed with the Oregon Secretary of State the

11 new constitution and bylaws and admits that the Secretary of State accepted the

12 bylaws as legitimate and that Wes Wagner was on the Oregon Secretary of State'

13 list of officers of the LPO at the referenced time, but otherwise denies the

14 remainder of allegations in paragraph 20 on the facts or because they are


16 21.

17 LPO admits that some registered voters affiliated with the Libertarian Party

18 met on May 21, 2011, and that Wagner, Tabor, Knight, and Vetanen did not attend

19 this meeting. LPO denies the remaining allegations in paragraph 21, and

20 affirmatively alleges for the sake of clarity that the adoption of the 2011 Bylaws

21 resulted in a cancellation of the continuation of the March 12, 2011 convention

22 meeting.

23 22.


25 plaintiffs'econd Amended Complaint. LPO admits that Article V of the 2009

26

HARRANG LONG GARY


16th Floor

Portland, OR 97204-1 t 16Phone 503 242 0000

Fax 503 241 1458


EXHIBIT 1Page 7

1 Bylaws states that "terms of office of all elected officers and directors shall begin

2 immediately upon the close of convention."

23.

4 LPO denies the allegations of paragraph 23 and affirmatively alleges for the

5 sake of clarity that the alleged convention meeting was cancelled as a result of the

6 adoption of the 2011 Bylaws.

24,

S LPO denies the allegation of paragraph 24 and affirmatively alleges for the

9 sake of clarity that even under the 2009 Bylaws, which were no longer operative,

10 Wagner's term as Chairperson, which started after the beginning of the 2011

11 annual convention, would end at the close of the next annual convention in March

12 2012, after a successor was elected by a proper quorum.

13 25.


15 plaintiffs'econd Amended Complaint. LPO denies the allegations of paragraph

16 25 either on the facts or as conclusions of law not requiring an answer.

17 26.

18 LPO denies the allegations of paragraph 26 either on the facts or as


20 27.

21 LPO admits that the Oregon Secretary of State has refused to get involved

22 in an internal political organization dispute and has stated that it requires a court

23 order to recognize someone other than the officers currently on file with the

24 Secretary of State's Office, denies the remaining allegations in paragraph 27 either

25 on the facts or as conclusions of law not requiring an answer, and affirmatively

26 alleges for the sake of clarity that Wagner (1) serves as chairperson at the pleasure

HAR RANG LONG GARY

RUDNICK P.C1001 SW Fifth Avenue

16th Floor


Fax 503 241 1456

Page S —DEFENDANT LIBERTARIAN PARTY OF OREGON'S SECONDAMENDED ANSWER, AFFIRMATIVE DEFENSES, ANDCOUNTERCLAIMS

EXHIBIT 1Page 8

1 of the Board of Directors, who can choose another chairperson at any meeting, and

2 (2) LPO members will choose a new Board of Directors in biennial elections to be

3 held in 2013 in accordance with the 2011 Bylaws.

5 Paragraph 28 alleges a conclusion of law not requiring an answer and an

6 incorrect one, at that, and therefore is denied,

29.

8 Paragraph 29 alleges a conclusion of law not requiring an answer, but is

9 denied. LPO affirmatively alleges for the sake of clarity that under ORS 248.004,

10 officers of a political party are treated as officers of a nonprofit corporation for

11 purposes of liability.

12 30.

13 Paragraph 30 alleges a conclusion of law not requiring an answer,

14 31.

15 LPO denies the allegations in paragraph 31 either on the facts or as

16 conclusions of law not requiring an answer and affirmatively alleges for thc sake

17 of clarity that under ORS 248.004, members of a political party are treated as

18 Directors of a nonprofit corporation for purposes of liability,

19 32,

20 Paragraph 32 alleges conclusions of law not requiring an answer, but is

21 denied to the extent an answer is required. LPO notes in particular that plaintiffs

22 have failed to comply with this Court's order granting LPO's motion to strike the

23 reference to "attorney fees," and have not repleaded in a way that complies with

24 ORCP 68. Rather than cause delay by initiating another round of ORCP 21

25 motions, LPO will address plaintiffs'ack of entitlement to attorney fees through a

26 different procedural mechanism at a later time.

HARRANG LONG GARY


16th Floor


Fax 503 241 1458

Page 9 —DEFENDANT LIBERTARIAN PARTY OF OREGON'S SECONDAMENDED ANSWER, AFFIRMATIVE DEFENSES, ANDCOIj NTKRCLAIMS

EXHIBIT 1Page 9

33,

2 1n response to paragraph 33, which does not contain any new allegations,

3 LPO admits and denies as set forth above.

34.



35.

8 LPO admits that the March 31, 2011, meeting was not a convention, and

9 otherwise denies the allegations in paragraph 35 either on the facts or as


36.



14 37.

15 In response to paragraph 37, which does not contain any new allegations,


17



20 39.

21 In response to paragraph 39, which does not contain any new allegations,


23 40.



26 ///

HARRANG LONG GARY


16th Floor


Fax 503 241 1456


EXHIBIT 1Page 10

41.

2 LPO denies each allegation that is not expressly admitted herein,

FIRST AFFIRMATIVE DEFENSE

(Failure to State a Claim)

42.

6 Plaintiffs'auses of action fail to state claims upon which relief may be

7 granted.

8 SECOND AFFIRMATIVE DEFENSE

(Standing)

10 43.

11 Plaintiffs Reeves, Saub, Burnett and Pealer lack standing to bring claims on

12 behalf of the LPO because they were not properly elected LPO officers under

13 either the 2009 Bylaws or the 2011 Bylaws at the time they commenced this

14 action.

15 44

16 Plaintiffs lack standing to bring claims on their own behalf or on behalf of

17 the LPO because their claim is entirely premised on the allegation that the 2011

18 Bylaws are not valid and the 2009 Bylaws have remained in effect. Under the

19 2009 Bylaws, no plaintiff was a member of the LPO at the time they commenced

20 this lawsuit.

21

22

23

THIRD AFFIRMATIVE DEFENSE

(Unconstitutionality)

45.

24 The relief plaintiffs seek may not be granted by this Court without violating

25 the free assembly clauses of the First Amendment to the United States

26 Constitution and Article 1, section 26, of the Oregon Constitution.

HAR RANG LONG GARY


16th Floor


Fax 503 241 1458


EXHIBIT 1Page 11

1 FOURTH AFFIRMATIVE DEFENSE

(Issue Preclusion)

46.

4 The Washington County Circuit Court entered a final judgment in Wagner

5 v, Libertarian Party ofOregon, case no. C064544CV, determining that the First

6 Amendment to the United States Constitution bars courts from ordering leaders of

7 the Libertarian Party of Oregon to comply with party bylaws.

FIFTH AFFIRMATIVE DEFENSE

(Illegality)

10 47.

11 The 2009 Bylaws fail to comply with ORS 248.005 and therefore may not

12 be enforced by the Court.

13

14

15

SIXTH AFFIRMATIVE DEFENSE

(Failure to Exhaust Internal Party Remedies)

16 Plaintiffs failed to exhaust intra-party processes before seeking relief from

17 the Court,

18 SEVENTH AFFIRMATIVE DEFENSE

19 (Exclusive Remedy Bar of the Oregon Administrative Procedure Act)

20 49.

21 Under Oregon Revised Statutes Chapter 248, Oregon political parties are

22 regulated by the Secretary of State.

23 50.

24 The Oregon Secretary of State, a government agency subject to the Oregon

25 Administrative Procedure Act, issued an order on September 29, 2011, deciding

26

HARRANG LONG GARY


16th Floor


Fax 503 241 1458


EXHIBIT 1Page 12

1 that the Secretary of State "currently recognize[sj, and will continue to recognize

2 Wes Wagner as Chair of the Libertarian Party of Oregon."

51.

4 Plaintiffs have failed to timely appeal the Secretary of State's order under

5 the Oregon Administrative Procedure Act.

52.

7 The Oregon Administrative Procedure Act provides the sole and exclusive

8 method of obtaining judicial review of the Secretary of State's order.

10

EIGHTH AFFIRMATIVE DEFENSE

(Failure to Join a Necessary Party)

53.

12 The complete relief plaintiffs seek —namely, recognition by the Oregon

13 Secretary of State —can only be accorded if plaintiffs bring a claim for relief against

14 the Oregon Secretary of State. Plaintiffs have failed to bring a claim against the

15 Oregon Secretary of State.

16

17

(Notice of Additional Affirmative Defenses)

54.

18 LPO hereby gives notice that it intends to rely upon such other affirmative

19 defenses as may become available or apparent during the course of discovery and

20 thus reserves the right to amend its Answer to assert such defenses.

21

22

23

COUNTERCLAIMS

Common Factual Allegations

55.

24 Prior to March 2011, the LPO had been operating under the 2009 Bylaws,

25 despite questions regarding whether those bylaws accurately reflected the action of

26 the LPO's 2009 State Convention. Among the provisions of the 2009 Bylaws is

HARRANG LONG GARY

RUDNIGKP C1001 SW Fifth Avenue


Phone 503 242 0000Fax 503 241 1456


EXHIBIT 1Page 13

1 one that limits full voting membership in the LPO to those who submit a

2 completed application and pay dues equal to the Oregon Political Tax Credit as set

3 for an individual. The 2009 Bylaws did not make all Oregon voters affiliated with

4 the Libertarian Party members of the LPO and did not limit membership to

5 Oregon voters affiliated with the Libertarian Party (in other words, people who

6 were not members of the Libertarian Party and were not residents of Oregon could

7 pay to become members of the LPO, but actual Oregon residents registered as

8 Libertarian Party voters could not be members of the LPO unless they paid dues).

9 At all relevant times, the annual dues pursuant to the 2009 Bylaws were $50.

10 56.

11 The 2009 Bylaws provided that "[o]nly LPO members who pay dues and

12 keep them current may hold LPO office."

13 57.

14 At all relevant times, ORS 248,005 provided: "Each political party by rule

15 shall insure the widest and fairest representation of party members in the party

16 organization and activities. Rules shall be adopted by procedures that assure the

17 fair and open participation of all interested party members." "Member" was

18 defined as: "an individual who is registered as being affiliated with the political

19 party." ORS 248.002(4).

20

21 The LPO adopted a Reformation Plan at its 2010 Annual Convention.

22 Among the provisions of the Reformation Plan were amendments to the LPO

23 bylaws making all registered Libertarian Party voters members of the LPO,

24 terminating the requirement to pay dues in order to be a member of the LPO, and

25 restructuring the leadership of the LPO organization.

26 ///

HARRANG LONG GARY

RUDNICK P C1001 SW Firth Avenue

16th Floor


Fax 503 241 1456


EXHIBIT 1Page 14

2 A special convention of the LPO was properly called for November 2010 to

3 implement the Reformation Plan. At the instigation of some of the plaintiffs, the

4 body was convinced that it lacked a quorum to take action and therefore did not

5 take action on the Reformation Plan.

60.

7 The annual meeting of the LPO was properly called for March 13, 2011.

8 Again, some of the plaintiffs convinced the body that it lacked a quorum to take

9 action and the meeting was adjourned to May 21, 2011. After the meeting, LPO

10 Chairperson Jeff Weston resigned, such that former Vice-Chairperson Wes

11 Wagner became Chairperson of the LPO.

12 61.

13 The LPO State Committee met at a properly called meeting on March 31,

14 2011. Recognizing that the position taken by certain plaintiffs regarding quorum

15 would prevent the LPO from ever taking action as a convention in the future, the

16 State Committee adopted the 2011 Bylaws and referred them to the voters of the

17 Libertarian Party for ratification. The 2011 Bylaws implement the Reformation

18 Plan adopted by the LPO in 2010, including: (a) the expansion of LPO

19 membership to all Libertarian Party voters; (b) the elimination of dues as a

20 requirement for membership; and (c) reformation of the leadership structure. The

21 State Committee appointed an initial Board of Directors pursuant to the 2011

22 Bylaws and officers were selected by the Board of Directors at a subsequent

23 meeting,

24 ///

25 ///

26 ///

HAR RANG LONG GARY

RUDNIGKP C1001 SW Fifth Avenue


Phone 503 242 0000Fax 503 241 1458

Page 15 —DEFENDANT LIBERTARIAN PARTY OF ORECON'S SECONDAMENDED ANSWER, AFFIRMATIVE DEFENSES, ANDCOUNTERCLAIMS

EXHIBIT 1Page 15

62.

2 The initial Board of Directors under the 2011 Bylaws included Defendants

3 Jim Karlock and Richard Skyba. Defendants Jeff Weston and Bruce Knight were

4 subsequently appointed to fill vacancies on the Board of Directors.

63.

6 The initial officers of the LPO under the 2011 Bylaws, appointed by the

7 Board of Directors at its first meeting after March 31, 2011, were Wes Wagner,

8 chairperson; Harry Joe Tabor, vice-chairperson; Mark Vetanen, treasurer, and

9 Bruce Knight, secretary.

10 64,

11 In a vote held by mail during June 2012, Libertarian Party voters in Oregon

12 overwhelmingly ratified the 2011 Bylaws.

13 65.

14 On May 21, 2011, certain of the plaintiffs and others purported to hold an

15 LPO State Committee meeting. That meeting was void for the following

16 independently sufficient reasons; (a) it was conducted pursuant to the 2009

17 Bylaws, which had been replaced by the 2011 Bylaws at the State Committee

18 meeting held on March 31, 2011; and (b) the meeting lacked the number of

19 attendees required to constitute a quorum.

20 66.

21 The persons purporting to hold an LPO State Committee meeting on May

22 21, 2011, took the position that all LPO officer positions were vacated and

23 purported to appoint new LPO officers: Plaintiff Reeves as Chair, Plaintiff Saub as

24 Vice Chair, Plaintiff Burnett as Treasurer and Plaintiff Pealer as Secretary.

25 ///

26 ///

HARRANG LONG GARY


16th Floor


Fax 503 241 1458


EXHIBIT 1Page 16

67.

2 The purported appointment of Plaintiff Reeves as LPO chairperson was

3 invalid for the following independently sufficient reasons: (a) the May 21, 2011,

4 meeting lacked a quorum; and (b) the office of chairperson had not been vacated

5 under the 2009 Bylaws and would not be vacated under the 2009 Bylaws until the

6 end of the LPO annual meeting in March 2012.

68.

8 If the 2009 Bylaws are operative and if Plaintiff Reeves was validly

9 appointed as LPO chairperson on May 21, 2011, the office of LPO chairperson

10 was vacated on October 6, 2011, when Plaintiff Reeves'PO membership expired

11 without being renewed.

12 69.

13 The purported appointment of Plaintiff Saub as LPO vice-chairperson was

14 invalid because the May 21, 2011, meeting lacked a quorum.

15 70.

16 If the 2009 Bylaws are operative and if Plaintiff Saub was validly appointed

17 as LPO vice-chairperson on May 21, 2011, the office of LPO vice-chairperson was

18 vacated on October 6, 2011, when Plaintiff Saub's LPO membership expired

19 without being renewed.

20 71,

21 The purported appointments of Plaintiff Burnett as LPO treasurer and

22 Plaintiff Pealer as LPO secretary were invalid for the following independently

23 sufficient reasons: (a) the May 21, 2011, meeting lacked a quorum; and (b) the

24 offices of LPO treasurer and LPO secretary had not been vacated under the 2009

25 Bylaws.

26 ///

HARRANG LONG GARY



Phone 503 242 0000Fax 503 241 1456


EXHIBIT 1Page 17

72.

2 If the 2009 Bylaws are operative and if Plaintiffs Burnett and Pealer were

3 validly elected as LPO treasurer and secretary, respectively, on May 21, 2011, the

4 offices of LPO treasurer and secretary were vacated on October 5, 2011, when

5 Plaintiffs Burnett's and Pealer's LPO memberships expired without being

6 renewed.

73.

8 The Oregon Secretary of State Elections Division recognizes Wes Wagner

9 as chairperson of the LPO.

10 74.

11 Since May 21, 2011, and continuing through the present, Plaintiff Reeves

12 has held himself out as the chairperson of the LPO, although he was not lawfully

13 elected or appointed to that position, he knows he is not recognized as such by the

14 Oregon Secretary of State Elections Division, and his ability to continue serving as

15 LPO chairperson under the 2009 Bylaws ended on October 6, 2011.

16 75.

17 Plaintiff Reeves has sent fundraising appeals and convention notices to

18 individuals, purportedly on behalf of the LPO, in which he identifies himself as

19 the chairperson of the LPO. If any funds were donated by individuals in response

20 to the fundraising appeals of Plaintiff Reeves, they have not been delivered to the

21 LPO treasurer, Defendant Vetanen.

22 76.

23 Defendant LPO does not waive its argument that constitutional rights to

24 free assembly preclude this Court from adjudicating intraparty disputes over the

25 enforcement of party bylaws or the status of party leaders, and reserves the right to

26

HARRANG LONG GARY

RUDNICKP C1001 SW Ftfth Avenue

16th Floor


Fax 503 241 1456


EXHIBIT 1Page 18

1 make that argument again in the future. This Court denied Defendant LPO's

2 motion to dismiss plaintiffs'laims on that ground, however.

3 FIRST COUNTERCLAIM FOR RELIEF

(Declaratory Judgment)

77.

6 Plaintiffs incorporate the allegations in paragraphs 1 through 76, above,

78.

8 A present controversy exists between the plaintiffs and the defendants as to

9 the operative bylaws of the LPO and the identity of the LPO's leaders. Based on

10 the facts stated above and incorporated herein, Defendant LPO seeks the following

11 declarations of this Court pursuant to ORS 28.010 to 28.160:

12 a. The 2011 Bylaws are the presently operative bylaws of the LPO;

13 b. Wes Wagner is chairperson of the LPO;

14 c, Harry Joe Tabor is vice-chairperson of the LPO;

15 d. Mark Vetanen is treasurer of the LPO;

16 e. Bruce Knight is secretary of the LPO and a member of the LPO

17 Board of Directors;

18 f. Jeff Weston, Jim Karlock and Richard Skyba are members of the

19 LPO Board of Directors;

20 g. Tim Reeves is not and has not been chairperson of the LPO;

21 h. Eric Saub is not and has not been vice-chairperson of the LPO;

22 Greg Burnett is not and has not been treasurer of the LPO;

23 j. Carla Pealer is not and has not been secretary of the LPO; and

24 k. The membership provisions of the 2009 Bylaws are invalid under

25 ORS 248.005.

26 ///

HARRANG LONG GARY


16th Floor

Portland, OR 97204-1 t 16Phone 503 242 0000

Fax 503 241 1456


EXHIBIT 1Page 19

SECOND COUNTERCLAIM FOR RELIEF

(Money Had and Received)

79.

4 Plaintiffs incorporate the allegations in paragraphs 1 through 78, above.

80.

6 Plaintiff Reeves has solicited funds from individuals on behalf of the LPO

7 without the authority to do so and based on the false statement that he is the

8 chairperson of the LPO. Plaintiff Reeves has not delivered any funds received in

9 response to such solicitations to Mark Vetanen, the treasurer of the LPO.

10 Plaintiffs cannot in equity and good conscience be permitted to keep any funds

11 they have received pursuant to such solicitations.

12 CLAIM FOR ATTORNEY FEES

13

14 Defendant LPO is entitled to recover its attorney fees from plaintiffs under

15 ORS 20.105 because there is no objectively reasonable basis for the claims

16 asserted in plaintiffs'econd Amended Complaint. Plaintiffs lack an objectively

17 reasonable basis to assert claims because, among other reasons, parties in privity

18 with plaintiffs have previously litigated the issue of whether an Oregon court can

19 force leaders of the LPO to comply with party bylaws. Plaintiffs are thus bound

20 by the Washington County court's ruling that courts cannot enforce LPO bylaws.

21 WHEREFORE, Defendant LPO prays for judgment as follows:

22 1. Judgment in its favor and against plaintiffs on all ofplaintiffs'3

claims for relief.

24

25

2. Reasonable attorney fees, costs and disbursements under ORS

20.105.

26

HARRANG LONG GARY


16th Floor

Portland, OR 97204-1 116Phone 503 242.0000

Fax 503 241 1456


EXHIBIT 1Page 20

1 On its FIRST COUNTERCLAIM FOR RELIEF (Declaratory Judgment), a

2 judgment pursuant to ORS 28.010 to 28.160 declaring that:

3 a. The 2011 Bylaws are the presently operative bylaws of the LPO;

4 b. Wes Wagner is chairperson of the LPO;

5 c. Harry Joe Tabor is vice-chairperson of the LPO;

6 d. Mark Vetanen is treasurer of the LPO;

7 e. Bruce Knight is secretary of the LPO and a member of the LPO

Board of Directors;

9 f. Jeff Weston, Jim Karlock and Richard Skyba are members of the

10 LPO Board of Directors;

11 g. Tim Reeves is not and has not been chairperson of the LPO;

12 h. Eric Saub is not and has not been vice-chairperson of the LPO;

13 i. Greg Burnett is not and has not been treasurer of the LPO;

14 j. Carla Pealer is not and has not been secretary of the LPO; and

15 k. The membership provisions of the 2009 Bylaws are invalid under

16 ORS 248,005,

17 3. On its SECOND COUNTERCLAIM FOR RELIEF (Money Had

18 and Received):

19 a. Judgment ordering the delivery to LPO treasurer Mark Vetanen all

20

21

22

sums received by Plaintiff Reeves in response to his solicitations of

funds purportedly on behalf of the LPO in which he held himself out

as the chairperson of the LPO; and

23 b. Imposition of a constructive trust in favor of Defendant LPO on all

24

25

26

HARRANG LONG GARY



Phone 503 242 0000Fax 503 241 1456

funds received by Plaintiff Reeves in response to his solicitations of

funds purportedly on behalf of the LPO in which he held himself out

as the chairperson of the LPO.


EXHIBIT 1Page 21

4. For such other and further relief as the Court may deem just and

2 proper.

DATED this day of March, 2013.


ByC. Robert Steringer, OSB f'I-'983514

bob.sterinper{a)harranv.cornTelephone: 503.242.0000Facsimile: 503.241.1458

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Trial Attorney: C. Robert Steringer

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HARRANG LONG GARY


16th Floor


Fax 503 241 1458

Page 22 —DEFENDANT LIBERTARIAN PARTY OF OREGON'S SECONDAMENDED ANSWER, AFFIRMATIVE DEFENSES, ANDCOIJNTKRCLAIMS

EXHIBIT 1Page 22

1 CERTIFICATE OF SERVICE

2 I certify that on March, 2013, I served or caused to be served a true

3 and complete copy of the foregoing DEFENDANT LIBERTARIAN PARTY

4 OF OREGON'S AMENDED ANSWER, AFFIRMATIVE DEFENSES, AND

5 COUNTERCLAIMS on the party or parties listed below as follows:

Via First Class Mail. Postage Prenaid

Via Email Transmission

10

12

VIA EMAILAND FIRST CLASS MAILTyler SmithNathan GoinTYLER SMITH 2 ASSOCIATES, P.C.181 N. Grant Street, Suite 212Canby, OR 97013

Attorneys for Plaintiffs

VIA EMAILAND FIRST CLASS MAILJames E. Leuenberger PCATTORNEY AND COUNSELOR AT LAW

5200 SW Meadows Road, Suite 150Lake Oswego, OR 97035

Attorneys for Defendant Wes Wagner

14VIA EMAIL

15 AND FIRST CLASS MAILColin AndriesAndries Law Offices1001 SW 5'" Avenue, Suite 1100Portland, OR 97204

18

Attorneys for Defendants Harry JoeTabor, Mark Vetanen, Bruce Knight,

20 Jeff Weston and Richard Skyba

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VIA FIRST CLASS MAILJim Karlock3311 NE

35'ortland,OR 97212

Defendant


By:C. Robert Steringer, OSB ¹983514bob. steringer@harranp. cornTelephone: 503.242.0000Facsimile; 503.241.1458


HARRANG LONG GARY



Phone 503 242 0000Fax 503 241 1456

Page I —CERTIFICATE OF SERVICEEXHIBIT 1Page 23

CERTIFICATE OF SERVICE

2 I certify that on March 25th, 2013, I served or caused to be served a true

and complete copy of the foregoing DEFENDANT LIBERTARIAN PARTY

4 OF OREGON'S MOTION FOR LEAVE TO FILE SECOND AMENDED

ANSWER, AFFIRMATIVE DEFENSES, AND COUNTERCLAIMS on the

6 party or parties listed below as follows:

X Via First Class Mail. Postage Prenaid

X Via Email Transmission

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12

13

14

15

16

17

19

VIA EMAIL AND FIRST CLASS MAILTyler SmithNathan GoinTYLER SMITH A. ASSOCIATES, P,C.181 N. Grant Street, Suite 212Canby, OR 97013

Attorneys for Plaintiffs

VIA EMAILColin AndriesAndries Law Offices1001 SW 5"Avenue, Suite 1100Portland, OR 97204

Attorneys for Defendants HarryJoe Tabor, Mark Vetanen. BruceKnight, Jeff Weston, JimKarlock, and Richard Skyba

VIA EMAILJames E. Leuenberger PCATTORNEY AND COUNSELOR AT LA W

5200 SW Meadows Road, Suite 150Lake Oswego, OR 97035

Attorneys for Defendant WesWagner

20 HARRANG LONG GARY RUDNICK P.C.

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HARRANG LONG GARY


16th Floor


Fax 503 241 1456

C, Robert Steringer, 0 ¹983514bob.steringerQa,harrang, omJohn C. Rake, OSB ¹105808iohn.rake(harrang.cornTelephone: 503,242.0000Facsimile: 503,241.1458


Page I —CERTIFICATE OF SERVICE

Documents

Motion for Leave to File Second Amended Answer (P0325875)