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R-CALF drops lawsuit against former directors
Published Wednesday, October 15, 2008 at 05:13 AM
Billings, Mont. – “On Thursday, Oct. 9, 2008, the R-CALF USA Board of Directors voted to dismiss its lawsuit filed in May 2007 against three former directors of the organization. The lawsuit alleged that the former directors had breached their fiduciary duty and violated Montana’s Trade Secrets Act.

In the lawsuit, R-CALF USA obtained a restraining order from the court that prohibited the former directors from using and disseminating R-CALF USA’s membership lists, employee-related documents and other documents marked ‘confidential.’ The organization also learned the names of the former members and employees who maintained and contributed to the anti-R-CALF USA Web site that had disclosed several of the organization’s confidential documents before it was dismantled.

The legal action also led to R-CALF USA’s complete settlement of a $325,000 debt (without any additional payment) that remained from a $1.8 million trade case the original organizers of R-CALF USA had incurred prior to the incorporation of R-CALF USA. As a result, R-CALF USA is now a debt-free organization.

R-CALF USA also learned during the case that, in January 2007, a former U.S. Department of Agriculture (USDA) Under Secretary for Marketing and Regulatory Programs, and his partner, a former USDA veterinarian, were instrumental in assisting three former R-CALF USA directors in taking action to stop R-CALF USA’s effort to prevent the implementation of USDA’s over-30-month (OTM) Rule.

Although the actions assisted in by the former USDA officials thwarted R-CALF USA’s effort to get the OTM Rule withdrawn without the need for litigation, the organization successfully overcame this obstacle in a lawsuit later filed in federal district court against USDA’s OTM Rule.

On July 3, 2008, the federal district court ruled that R-CALF USA’s initial objection against the OTM Rule warranted a remand back to the agency for a new rulemaking, which partially accomplished what R-CALF USA had tried to force the agency to do before the rule was even published. However, by the time the court could ultimately decide the issue, the border already had been reopened to OTM beef from Canada for longer than seven months.

Soon after the favorable ruling by the federal district court on the issue central to the organization’s lawsuit against the former directors, R-CALF USA extended a settlement offer to end the lawsuit against those individuals. R-CALF USA asked for nothing more than a promise by the former directors not to use R-CALF USA’s property – neither its membership lists, nor its confidential documents.

The former directors refused to settle, so the organization motioned the court to order mediation to resolve the case, but the former directors objected to R-CALF USA’s effort to seek mediation.

R-CALF USA’s board of directors is confident that it has now fulfilled its fiduciary duty to take all reasonable steps to protect the organization’s assets – its members’ and employees’ information and its capacity to carry out its member policy. The directors also believe that ongoing litigation is unlikely to result in any additional benefits. For these reasons the decision was made to dismiss the lawsuit against the former directors.”


© 2008 The Nebraska Rural Radio Association. All rights reserved.
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