Case Number: BC543782    Hearing Date: July 18, 2014    Dept: 34

SUBJECT: Motion to Compel Arbitration; Motion to Stay Case Pending Arbitration

Moving Party: Defendants Brian D’Arcy, David Donovan, Dave Hanson, and Jesse Mercado (“defendants” or “IBEW”)

Resp. Party: Plaintiffs James McDaniel, Dave Thrasher, Richard Llewellyn, and Michael F. Fleming, as trustees for the Local 18, IBEW-DWP Joint Training Institute and the Local 18, IBEW-DWP Joint Safety Institute (“plaintiffs” or “DWP”)

Defendants’ motion to compel arbitration is DENIED. Because the motion to compel arbitration is denied, defendants’ request to stay the action pending arbitration is also DENIED.

PRELIMINARY COMMENTS:

Defendants have indicated that the “Court’s duty in these circumstances is straightforward and simple.” (Motion to Compel Arbitration, p. 1:16.) They are correct.

In this motion and in the DWP’s companion motion for a preliminary injunction, IBEW spends much time discussing the alleged politics behind the appointment by the DWP of two of its trustees. These political questions are irrelevant for the Court’s determination of the issues before it.

The issue before the Court in this motion is “straightforward and simple”: is IBEW’s objection to the two recently-appointed DWP trustees an issue that must be arbitrated under the agreements between IBEW and the DWP?

In this motion, the Court can state with “positive assurance” that the IBEW’s objection to the two specific Trustees appointed by the DWP is not arbitrable.

BACKGROUND:

Plaintiffs commenced this action on 4/24/14 against defendants for injunctive and declaratory relief. Plaintiffs are employer-trustees for the Joint Training Institute (JTI) and the Joint Safety Institute (JSI), and defendants are the union-trustees of the Institute. (Compl., ¶¶ 1-8.) The JSI is a non-profit trust established through collective bargaining between the IBEW and the DWP which is designed to improve workplace safety through development of safety training systems. (Id., ¶ 11.) The JSI is governed by an agreement entered into on 7/1/00. (Id., ¶ 11, Exh. A.) The JTI is also a non-profit trust established through collective bargaining between the IBEW and DWP which serves as an independent advisory board regarding workforce training. (Id., ¶ 12.) It is governed by an agreement entered into on 7/1/02. (Id., ¶ 12, Exh. B.) The Trusts are independent bodies. (Id., ¶ 13.) Each trust is governed by a joint management-labor board of trustees. (Id., ¶¶ 14-17.) The Trusts do not require IBEW’s consent to a DWP trustee appointment, do not establish requirements for trustee qualification, and do not require a meeting or vote of trustees for the appointment of a trustee. (Id., ¶ 18.) In the event of a vacancy, the party who appointed the vacant trustee appoints a successor. (Ibid.) The trustees may not act unless there is an equal number of appointed trustees. (Id., ¶ 19.)

Before 1/31/14, the acting employer-trustees were plaintiffs McDaniel and Thrasher, then-general manager of the DWP Ron Nichols, and then-Senior Assistant General Manager of the DWP Aram Benyamin. (Compl., ¶ 21.) On 1/31/14, Nichols tendered his resignation and removed Benyamin, thereby leaving two vacancies and an unequal number of appointed trustees. (Ibid.) On 2/5/14, DWP appointed plaintiff Llewellyn as a successor to Nichols, and Llewellyn accepted the appointment on 2/13/14. (Id., ¶¶ 22-23, Exhs. C, D.) On 3/6/14, DWP appointed plaintiff Fleming as a successor to Benyamin, and Fleming accepted on that same day. (Id., ¶¶ 24-25, Exhs. E, F.) Despite these valid appointments, defendants have refused and continue to refuse to recognize the validity of the appointments, contending that Llewellyn and Fleming are not qualified to serve as trustees and that their appointments are subject to a vote of the Board of Trustees. (Id., ¶ 27.) Plaintiffs allege that the Trust agreements do not require the trustees’ consent to appointments. (Id., ¶¶ 28-30.) Plaintiffs allege that defendants’ conduct has resulted in or threatens to bring irreparable harm to the Trusts because the Trusts are prohibited by the express terms of the agreements from taking action until the trustees are appointed. (Id., ¶¶ 32-39.)

ANALYSIS:
“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Cal. Code of Civ. Proc, §1281.) Section 1281.2 of the Code of Civil Procedure states in pertinent part:

On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: [¶] (a) The right to compel arbitration has been waived by the petitioner; or [¶] (b) Grounds exist for the revocation of the agreement.

(Cal. Code Civ. Proc., §. 1281.2.)

A proceeding to compel arbitration is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance Co. (1975) 14 Cal.3d 473, 479.) Such enforcement may be sought by a party to the arbitration agreement. (Cal. Code Civ. Proc., § 1280, subd. (e)(1).)

The petition to compel arbitration functions as a motion and is to be heard in the manner of a motion, i.e., the facts are to be proven by declaration and documentary evidence, with oral testimony taken only in the court’s discretion. (Cal. Code Civ. Proc., §1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413 414.)

In deciding a petition to compel arbitration, trial courts must determine two gateway quesitons: 1) does an enforceable arbitration agreement exists between the parties, and 2) are the claims covered within the scope of the agreement? (Omar v. Ralphs Grocer Co. (2004) 118 Cal.App.4th 955, 961.) “The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court’s discretion, to reach a final determination.” (Engalla v. Permanente Medical Group, Inc.(2007) 15 Cal.4th 951, 972 [citations omitted].)

“[U]nder section 1281.2, it is the trial court that determines if there is a duty to arbitrate the particular controversy which has arisen between the parties. [Citation.] In performing its duty to determine if the parties have agreed to arbitrate that type of controversy, the court is necessarily required ‘to examine and, to a limited extent, construe the underlying agreement.’ [Citation.]” (United Transportation Union v. Southern Cal. Rapid Transit Dist. (1992) 7 Cal.App.4th 804, 808.) “Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.” (Ibid.) “ ‘Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.’ [Citation.] The court also determines what issues are subject to arbitration.” (Engineers & Architects Assn. v. Community Development Dept. (1994) 30 Cal.App.4th 644, 653.)

As our Supreme Court stated in one of the cases relied heavily upon by defendants, “unless an arbitration agreement expressly provides otherwise, a dispute regarding the arbitrability of a particular dispute is subject to judicial resolution.” (City of Los Angeles v. Superior Court (2013) 56 Cal.4th 1086, 1093, 1096.) (See City of Los Angeles, 56 Cal.4th at pp. 1096-1097.) Disputes arising from a collective bargaining agreement are afforded a “presumption of arbitrability” and a court should order arbitration “unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” (Id. at p. 1096.) The instant action pertains to the trust agreements; there appears to be no disagreement that these trusts were developed through collective bargaining.

“[A] gateway dispute about whether the parties are bound by a given arbitration clause raises a ‘question of arbitrability’ for a court to decide. . . . Similarly, a disagreement about whether an arbitration clause in a concededly binding contract applies to a particular type of controversy is for the court.” [Citation.] . . . . [I]ssues of substantive arbitrability are for a court to decide while issues of procedural arbitrability are for an arbitrator to decide. [Citation.] Such procedural issues to be decided by an arbitrator include allegations of waiver and delay and whether prerequisites such as time limits, notice, laches, estoppel and other conditions precedent to an obligation to arbitrate have been met. [Citation.]

(Omar, supra, 118 Cal.App.4th at p. 960.)

There is no dispute between the parties that both trust agreements contain a binding arbitration clause. Therefore, the only gateway question that this Court must determine is whether the arbitration clause in this “concededly binding contract applies” to IBEW’s objection to the selection of the two DWP’s trustees.

IBEW argues that Article V, section 6 of the agreements includes a binding agreement to arbitrate all disputes between the trustees over interpretation and application of the agreements. In their motion, defendants only quote a portion of this section. (See Motion, p. 7.) The full text of the section states:

The exercise of any power or right reserved to the Trustees under this Agreement shall be only by the vote of the Employer Trustees and the vote of the Union Trustees cast in the manner described above. In the event of a deadlock of the Board of Trustees on any matter within the scope of the terms of this Agreement, the matter may upon five (5) business days written notice by either the DWP or the Union Trustees be referred by them for final decision to a neutral person to decide such dispute, and if the Trustees cannot agree upon a neutral person within fifteen (15) days of the notice of referral of said deadlock, the Superior Court of the State of California for the county in which the Trust Fund has its principal office may be petitioned to appoint such neutral person, and the decision of such neutral person shall be final and binding upon the parties with respect to the matter referred to such neutral person for decision. Such neutral person shall have no authority to alter, amend, or modify this Declaration of Trust. Within the scope of such authority, the decision of said neutral person shall be final and binding upon the Trustees as to such matter which may be in dispute. Any expenses incurred for the services of such neutral person shall be paid out of the Trust Fund. Any other expenses (such as attorney fees) incurred by either party shall be paid by the party who incurred them.

(See Heine Decl., Exhs. 13, 14 [Art. V, § 6].) Section 6 does not define the term “deadlock” and defendants do not point to language in the agreements defining this term. The term is discussed the preceding sections in Article V. For example, section 3 states:

Unless the vote of the DWP Employer Trustees and the vote of the Union Trustees shall concur, the subject matter for which the voting has been taken shall be deemed deadlocked and be subject to the dispute procedures set forth hereinafter.

(See Heine Decl., Exhs. 13, 14 [Art. V, § 3].)

DWP argues that this language means that their claims are not subject to the arbitration clause because they indisputably do not involve a deadlocked vote taken at a board meeting. IBEW argues that the occurrence of a deadlock is a condition precedent to an obligation to arbitrate, and is thus a procedural issue to be determined by the arbitrator.

The Court agrees with plaintiffs’ interpretation. Sections 3 and 6, when read together, compel the conclusion that the dispute resolution provision applies only to deadlocks on votes taken at board meetings. This is a limit on the type of dispute, and not a condition precedent. It is undisputed that plaintiffs’ claims do not involve a deadlocked vote of the board members; instead, it pertains to a dispute as to whether Llewellyn and Fleming may be appointed to the board. Defendants point to no language in the agreements that provides for arbitration of disputes over board membership.

Defendants rely heavily, in both their motion and their reply, on City of Los Angeles v. Superior Court. Although the general principles enunciated in City of Los Angeles clearly apply, the factual context of that case is quite different than the case before this Court. In City of Los Angeles, the issue was whether City-imposed furloughs – which clearly impacted the “wage and workweek provisions of the MOU” – (see id., at p. 1098) would be arbitrated under the MOU. Here, the issue is whether IBEW can challenge the seating of DWP-selected trustees – a right that is clearly reserved in the agreements for the DWP. The comparable situation in City of Los Angeles would be if the Union had objected to the negotiators that the City had selected to negotiate an amendment to the MOU. This court finds it doubtful that our Supreme Court would have held that such a grievance would be arbitrated.

This Court can state with “positive assurance” that the arbitration clause is not susceptible of an interpretation that covers IBEW’s objection to the DWP picking its own Trustees. (Omar, supra, 118 Cal.App.4th at p. 960.)

Defendants’ motion to compel arbitration is DENIED. Because the motion to compel arbitration is denied, defendants’ request to stay the action pending arbitration is also DENIED.

SUBJECT: Motion for Preliminary Injunction

Moving Party: Plaintiffs James McDaniel, Dave Thrasher, Richard Llewellyn, and Michael F. Fleming, as trustees for the Local 18, IBEW-DWP Joint Training Institute and the Local 18, IBEW-DWP Joint Safety Institute (“plaintiffs” of “DWP”)

Resp. Party: Defendants Brian D’Arcy, David Donovan, Dave Hanson, and Jesse Mercado (“defendants” or “Union”)

Plaintiffs’ motion for a preliminary injunction is GRANTED.

Defendants’ Objections to the Declaration of James McDaniel:

Objection
1 SUSTAINED
2 OVERRULED
3 OVERRULED
4 OVERRULED
5 OVERRULED
6 SUSTAINED
7 OVERRULED
8 SUSTAINED
9 OVERRULED
10 SUSTAINED
11 OVERRULED
12 OVERRULED
13 OVERRULED
14 OVERRULED
15 OVERRULED
16 OVERRULED
17 OVERRULED
18 OVERRULED
19 OVERRULED
20 OVERRULED
21 OVERRULED
22 SUSTAINED
23 OVERRULED
24 OVERRULED

PRELIMINARY COMMENTS:

For the reasons discussed in the tentative ruling on defendants’ motion to compel arbitration, the Court rejects defendants’ argument that the instant motion should be denied or stayed pending arbitration procedures. The Court’s ruling on that motion also dispenses with IBEW’s argument that the DWP is not likely to succeed on the merits because the action should be submitted to arbitration.

ANALYSIS:

Plaintiffs seek a preliminary injunction enjoining defendants from refusing to recognize Llewellyn and Fleming as DWP trustees on the JSI and JTI boards; refusing to recognize the vesting of all estate, rights, powers, discretion, duties, and obligations of a trustee in Llewellyn and Fleming as duly appointed trustees; and refusing to convene a meeting of the board of trustees, including Llewellyn and Fleming, for purposes of administering the trusts. Plaintiffs alternatively seek a preliminary injunction requiring defendants to recognize Llewellyn and Fleming as DWP trustees on the JSI and JTI boards; recognizing the vesting of all estate, rights, powers, discretion, duties, and obligations of a trustee in Llewellyn and Fleming as duly appointed trustees; and convening a meeting of the board of trustees, including Llewellyn and Fleming, for purposes of administering the trusts

An injunction is an order requiring one to refrain from a particular act or to do a particular act. (People ex rel. Gwinn v. Kothari (2000) 83 Cal.App.4th 759, 765 [citing Code Civ. Proc, §525].) “The ultimate questions on a motion for a preliminary injunction are (1) whether the plaintiff is ‘likely to suffer greater injury from a denial of the injunction than the defendants are likely to suffer from its grant,’ and (2) whether there is ‘a reasonable probability that the plaintiffs will prevail on the merits.'” (Huong Que, Inc. v. Luu (2007) 150 Cal.App.4th 400, 408.) “In seeking a preliminary injunction, [the party seeking the injunction] b[ears] the burden of demonstrating both likely success on the merits and the occurrence of irreparable harm before a final judgment could be entered.” (Savage v. Trammell Crow Co. (1990) 223 Cal.App.3d 1562, 1571; Citizens for Better Streets v. Board of Sup’rs of City and County (2004) 117 Cal.App.4th 1, 6.)

1. The Court Finds That Plaintiffs Are Likely to Prevail on the Merits of Their Claims

Plaintiffs argue that they are likely to prevail on the merits of their claims because the clear and unambiguous language of the trust agreements vests the DWP with the sole and exclusive power to appoint its trustees. “The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.” (Civ. Code, § 1638.) Interpretation of a contract is generally a judicial function determined solely by the terms of the agreement. (Wolf v. Walt Disney Pictures and Television (2008) 162 Cal.App.4th 1107, 1125-1126.) However, where the terms of the contract are ambiguous, extrinsic evidence may be used to determine the parties’ objective intent. (Id. at 1126 [citing Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging (1968) 69 Cal.2d 33, 37 [where extrinsic evidence reveals that the language in a contract is “susceptible to more than one reasonable interpretation,” then extrinsic evidence may be used].)

Article IV of the agreements pertains to the appointment and removal of trustees to the boards. Section 1 of Article IV of the JSI agreement provides, in relevant part:

“The DWP and the IBEW shall each appoint an equal number of Trustees, but not less than two (2) by each party. Such appointments shall be made in writing, and written evidence thereof shall be signed by the General Manager of the Department of Water and Power in the case of an appointment by the DWP and the Business Manager of IBEW Local 18 the case of an appointment by the IBEW.
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“The IBEW and DWP shall have the right to designate alternate Trustees, provided that at all times the number of acting Employer Trustees or Union Trustees shall be equal. In the event there are an un-equal number of Trustees at any time, the Trustees shall not act until an equal number has been appointed. No alternate Trustee shall have the power to vote unless be has been authorized by the DWP or the IBEW to fill the place of an absent Employer Trustee or Union Trustee.”

(McDaniel Decl., Exh. A, Art. IV, § 1.) Section 1 in the JTI agreement contains similar language, except that it provides that there must be at least four (4) trustees appointed by each party. (See id., Exh. B, Art. IV, § 1.)

Section 2 of the agreements provides:

“Any Trustee (or successor Trustee) appointed hereunder may qualify by executing and delivering to the DWP, to the IBEW and to the principal place of business of the Board of Trustees an instrument accepting such appointment and agreeing to be bound by the terms of this Trust. Thereafter and upon signing this Agreement, such Trustee, without any further act, shall become vested with all of the estate, rights, powers, discretion, duties and obligations of a Trustee and shall be deemed to accept the duties of a Trustee as created and established by this Agreement.”

(Id., Exh. A, Art. IV, § 2; Exh. B, Art. IV, § 2.)

Pursuant to section 6:

“In the event of the resignation, removal, disqualification or disability of any Trustee, a successor shall immediately be appointed by the DWP or the IBEW depending in each instance upon which of said parties appointed the Trustee whose position has become vacant. The party designating any successor Trustee to fill any vacancy shall forthwith notify all of the Trustees and the and the [sic] DWP and the IBEW of the name and address of each such new Trustee.”

(Id., Exh. A, Art. IV, § 6; Exh. B, Art. IV, § 6.) “No vacancy or vacancies in the office of the Trustee shall impair the power of the remaining Trustees acting in the manner herein provided to administer the affairs of the Trust.” (Id., Exh. A, Art. IV, § 7; Exh. B, Art. IV, § 7.)

A. Section 2 is not Ambiguous

IBEW argues that section 2 is ambiguous because of its use of the words “may” and/or “thereafter.” (See Opp., p. 11.) Neither argument is well-taken.

First, IBEW asserts that section 2 is ambiguous because it states an appointed trustee “may qualify” instead of “shall qualify.” (See Opp., p. 11:11-20.)

Section 2 provides that “[a]ny Trustee (or successor Trustee) appointed hereunder may qualify by executing and delivering to the DWP, to the IBEW and to the principal place of business of the Board of Trustees an instrument accepting such appointment and agreeing to be bound by the terms of this Trust.” Defendants point to no language in the trust agreements which include any other requirements or procedures for qualification. The use of word “may” simply does not imply that other unmentioned qualifications could apply. Rather, when read in context, it is clear that this sentence states that once an appointed trustee has executed and delivered the described instrument, such appointee has done all that is necessary to qualify.

IBEW’s second argument based on the word “thereafter” is even more frivolous. To quote verbatim from Defendants’ opposition:

“Article IV, Section 2 goes on to provide that, ‘thereafter . . . such Trustee, without further act [by the appointee], shall become vested with all the estate, rights, powers, discretion, duties and obligations of a trustee.’ ‘Thereafter’ is a long time. It could plausibly mean, “at some later point in time,” (such as after the appointee has been met, vetted and approved by the Boards of Trustees as qualified and capable of exercising the fiduciary duty to act solely and exclusively in the interest of the beneficiaries) the appointed trustee ‘shall then become vested’ with the authority and responsibility of a trustee.” (Opp., p. 11:21-27 [emphases, ellipses and brackets added by Defendants.])

As pointed out by the DWP in its reply (See Reply, p. 9) defendants’ use of ellipses and brackets in their citation to Section 2 hides – either deliberately or unintentionally – the plain meaning of the section. The actual wording of Section 2 is:

“Thereafter, upon signing this Agreement, the Trustee, without any further act, shall become vested with all of the estate, rights, powers, discretion, duties and obligations of a Trustee and shall be deemed to accept the duties of a Trustee as created and established by this Agreement.” (McDaniel Decl., Exh. A, B, Art. IV, § 2.)

In their opposition, defendants inexplicably add “[by the appointee]” after “any further act.” (See Opp., p. 11:22.) Defendants provide no explanation or evidence to support their interpretation that “any further act” only refers to acts of the appointee. Defendants point to no language in the trust agreements which provide that a trustee appointee must be vetted and approved by the board.

The Court has no difficulty finding that the plain language of the agreements provides that the DWP has exclusive power to appoint its own trustees (just as the IBEW has exclusive power to appoint its own trustees), that any such appointed trustees are to be qualified by executing and delivering the described instrument, and that the appointed trustees are to be vested with the powers of a trustee upon the signing of the agreement and without any further actions.

DWP presents evidence that, when Nichols and Benyamin left the boards, there was an unequal number of employer and union trustees. (See McDaniel Decl., ¶ 14.) DWP thereafter, in a writing signed by the general manager, appointed Llewellyn as trustee and Llewellyn delivered to the DWP, IBEW, and the Board his written acceptance of appointment and agreement to be bound by the terms of the trusts. (Id., ¶¶ 14-15, Exhs. C, D.) DWP also, in a writing signed by the general manager, appointed Fleming as trustee and Fleming delivered to the DWP, IBEW, and the Board his written acceptance of appointment and agreement to be bound by the terms of the trusts. (Id., ¶¶ 16-17, Exhs. E, F.) There is no dispute that IBEW has refused to recognize the validity of Llewellyn and Fleming as trustees. This evidence is sufficient to support DWP’s claims that the appointments of Llewellyn and Fleming were valid and effective and that all rights, etc., of a trustee were vested in them, and that defendants are acting in violation of the trust agreements by not recognizing such.

B. IBEW has Not Shown That Llewellyn and Fleming Have Conflicts of Interest.

IBEW argues that the DWP is not likely to prevail on the merits because Llewellyn and Fleming may have conflicts of interest. The agreements include the following provision:

No Trustee shall deal with the assets of the Institute for his or her own interest or account, nor shall a Trustee act in his or her individual or any other capacity other than as a Trustee in any transaction involving the Institute or represent a party whose interests are adverse to the interests of the Institute, nor shall any Trustee receive any consideration for his or her own personal account from any party dealing with the institute in connection with a transaction involving the Institute.

(See McDaniel Decl., Exh. A, Art. IV, § 3; Exh. B, Art. VI, § 7.)

IBEW has not argued – nor has it presented any evidence – that Llewellyn and Fleming would “deal with the assets of the Institute for [their] own interest or account” or that they would “receive any consideration for [their] own personal account from any party dealing with the institute in connection with a transaction involving the Institute.” (McDaniel Decl., Exh. A, Art. IV, § 3; Exh. B, Art. VI, § 7.)

IBEW’s real concern is that Llewellyn and Fleming would, as trustees, “represent a party whose interests are adverse to the interests of the Institute.” Defendants assert that they will show at trial that Llewellyn and Fleming represent the Mayor of Los Angeles, whose interests are adverse to the trusts. IBEW does not provide credible evidence to support its assertion that Llewellyn and Fleming have conflicts of interest. At most, its evidence suggests that Llewellyn and Fleming previously worked for, worker with and/or supported the Mayor. (See Heine Decl., Exhs. 1-4.)

However, IBEW has presented no evidence which establishes that Llewellyn and Fleming are agents of the Mayor or are otherwise directed by the Mayor. More importantly, IBEW provides no evidence to support its speculative assertion that the Mayor’s interests are “adverse to the interests” of the trusts.

The Court finds that plaintiffs have sufficiently shown a likelihood that they will prevail on their claims.

2. The Court Finds That Plaintiffs Would Suffer Irreparable Harm Absent a Preliminary Injunction

It must next be decided whether plaintiffs are likely to suffer a greater injury from the denial of the requested injunctive relief.

Although the trial court has broad discretionary powers to grant or deny a request for a preliminary injunction, it has “no discretion to act capriciously.” [Citation.] It must exercise its discretion “in favor of the party most likely to be injured.” [Citations.] If the denial of an injunction would result in great harm to the plaintiff, and the defendants would suffer little harm if it were granted, then it is an abuse of discretion to fail to grant the preliminary injunction. [Citations.]

(Robbins v. Superior Court (1985) 38 Cal.3d 199, 205.)

“An evaluation of the relative harm to the parties upon the granting or denial of a preliminary injunction requires consideration of: ‘(1) the inadequacy of any other remedy; (2) the degree of irreparable injury the denial of the injunction will cause; (3) the necessity to preserve the status quo; [and] (4) the degree of adverse effect on the public interest or interests of third parties the granting of the injunction will cause.'” (Vo v. City of Garden Grove (2004) 115 Cal.App.4th 425, 435.) “‘[T]he more likely it is that plaintiffs will ultimately prevail, the less severe must be the harm that they allege will occur if the injunction does not issue …. [I]t is the mix of these factors that guides the trial court in its exercise of discretion.'” (Right Site Coalition v. Los Angeles Unified School Dist. (2008) 160 Cal.App.4th 336, 342.) The legal remedy must be inadequate, which is related to the requirement of irreparable harm. (See Code Civ. Proc, §526a; Weil & Brown, Civ. Pro. Before Trial (The Rutter Group 2012) ¶¶ 9:519 [”Injunctions will rarely be granted (absent specific statutory authority) where a suit for damages provides a clear remedy.”], 9:522 [”Relief is unlikely unless someone will be significantly hurt in a way which cannot be later repaired.”].)

DWP argues that IBEW’s conduct threatens to cause irreparable harm to the trust and its beneficiaries because it threatens to impede the administration of the trusts. DWP argues that the boards are prohibited from taking any action until Llewellyn and Fleming are recognized as trustees, and that the trusts continue to make expenditures without the oversight of the boards. (See McDaniel Decl., ¶ 25.) McDaniel declares that the boards cannot properly monitor or administer an upcoming contribution from DWP to the trusts if Llewellyn and Fleming are not recognized as trustees. (Id., ¶ 31.) DWP argues that the refusal to recognize the appointments could result in a violation of the trust agreements because the board must meet quarterly. (Id., ¶ 32.)

DWP also argues that IBEW has engaged in improper conduct relating to investigations by the City Controller and District Attorney into a $40 million contribution made to the trusts. (See Motion, p.8:22-9:6 and fns. 2 and 3; McDaniel Decl., ¶¶ 26-29, 33.)

The Court need not determine whether the above factors would result in irreparable harm because the Court finds that Plaintiffs would be irreparably harmed because IBEW is denying them their rights to participate in the administration of the trusts. The evidence shows that, despite DWP’s appointment of Llewellyn and Fleming and their acceptance of the appointments, defendants have refused to recognize the validity of the appointments. (See McDaniel Decl., ¶ 19; D’Arcy Decl., ¶ 5.) This is sufficient to establish that if an injunction is not issued, DWP’s right to appoint trustees and its trustees’ rights to serve on the board and exercise their other rights as provided in the agreements would be violated. (See, e.g., D’Arcy Decl., ¶ 6.)

Even if this were the only irreparable harm shown by plaintiffs, it is greater than the possible harm shown by IBEW because defendants fail to show that any harm will be suffered by them or others if the injunction is granted. IBEW only makes conclusory assertions that Llewellyn and Fleming are “clearly ill-equipped” to conduct JSI and JTI business and that they will “inevitably develop intractable conflicts of interest.” (See Opp., p. 10.) IBEW provides no evidence as to the qualifications of Llewellyn and Fleming or their ability to conduct board business. As discussed above, defendants have not sufficiently supported their speculation that Llewellyn and Fleming have conflicts of interest.

The Court finds that the balance of hardships weighs in favor of plaintiffs, and that there would be irreparable harm if an injunction were not issued.

Accordingly, plaintiffs’ motion for a preliminary injunction ordering defendants to recognize Plaintiffs Llewellyn and Fleming as Employer Trustees is GRANTED.