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ROBERT C. HOLTZAPPLE, ESQ. (SBN 145954)
EPSTEIN HOLTZAPPLE CHRISTO LLP
999 Fifth Avenue, Suite 420
San Rafael, CA 94901
Tel: (628) 240-3854
bob@ehc.law
ANNE E. LINDER, ESQ. (pro hac vice forthcoming)
DANIEL A. GROSSMAN, ESQ. (pro hac vice forthcoming)
ZVMLAW PLLC
777 East Eisenhower Parkway, Suite 910
Ann Arbor, Michigan, 48108
Tel: (734) 794-3070
anne@zvmlaw.com
danny@zvmlaw.com
Attorneys for Plaintiffs
10 SUPERIOR COURT OF THE STATE OF CALIFORNIA
11 COUNTY OF SONOMA
ZN 12 THOMAS SMITH, an individual; and Case No. SCV-272627
ue SERIOUS POD LLC, individually and
Fol 13
are derivatively on behalf of OPENING
O-— 14 ARGUMENTS MEDIA LLC, a California limited REPLY TO PHILLIP ANDREW TORREZ’S
liability company, NOMINATION OF MATTHEW SHEFFIELD
15 TO SERVE AS A RECEIVER OF
—— OPENING ARGUMENTS MEDIA LLC
Plaintiffs,
LL 16
Vv.
Date: January 19, 2024
17
PHILLIP ANDREW TORREZ, an individual; Time: 3:00 p.m.
18 and DOES 1-10, Dept.: 17
Judge: Hon. Bradford DeMeo
19 Defendants,
20 Complaint Filed: February 14, 2023
and
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OPENING ARGUMENTS MEDIA LLC, a Trial Date: August 2, 2024
22 California limited liability company, and
OPENING ARGUMENTS FOUNDATION INC.,
23 a California nonprofit corporation,
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Nominal Defendants.
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Page 1 of 6
Thomas Smith, et al. vs. Phillip Andrew Torrez, et al., Sonoma County Case No. SCV-272627
REPLY TO PHILLIP ANDREW TORREZ’S NOMINATION OF MATTHEW SHEFFIELD TO SERVE AS A
RECEIVER OF OPENING ARGUMENTS MEDIA LLC
I INTRODUCTION
Plaintiffs object to Defendant Torrez’s nomination of Matthew Sheffield (“Sheffield”) to
serve as a receiver of Opening Arguments Media LLC (the “Company”). As discussed herein,
Sheffield is an inappropriate choice because he is statutorily prohibited from managing a
company with which he competes, he lacks the track record necessary to perform the role,
he appears biased in favor of the current cohost of the Opening Arguments podcast (the “OA
Podcast”), and his conservative media background would undermine his efforts to rebuild the
audience of an overtly progressive podcast. Accordingly, Plaintiffs request that Torrez’s
10 nomination of Sheffield be rejected and that Yvette d’Entremont (“d’Entremont”) be
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appointed.
ZN 12
ue Il. ARGUMENT
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are
A. Sheffield Is Statutorily Barred from Serving As Receiver
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Under California law, a manager of an LLC must “refrain from competing with the
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LL 16 limited liability company.” Corp. Code §§ 17704.09(b)(3) and (f)(1). Sheffield, who would be
17 functioning as a manager for the Company, admits in his declaration that he creates podcasts
18 covering the same topics and material as the OA Podcast. Sheffield Decl. 8. In fact,
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Sheffield has created dozens of podcasts covering the same material as the OA Podcast in
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just the last two years, including when current OA Podcast host Liz Dye (“Dye”) appeared on
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Sheffield’s Theory of Change podcast to discuss lawsuits against radio host Alex Jones at
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23 the same time the OA Podcast was covering those same lawsuits. Declaration of Thomas
24 Smith in Opposition to Philip Andrew Torrez’s Nomination of Matthew Sheffield to Serve as
25 Receiver of Opening Arguments Media LLC (“Smith Decl.”) {| 2-3. Nothing in Torrez’s
26 nomination addresses this clear conflict of interest. Were Sheffield appointed as receiver,
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there would be nothing to stop him from using confidential OA Podcast information for the
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Page 2 of 6
Thomas Smith, et al. vs. Phillip Andrew Torrez, et al., Sonoma County Case No. SCV-272627
REPLY TO PHILLIP ANDREW TORREZ’S NOMINATION OF MATTHEW SHEFFIELD TO SERVE AS A
RECEIVER OF OPENING ARGUMENTS MEDIA LLC
gain of his own competing podcasts. Sheffield thus has precisely the kind of conflict of interest
that prohibits one from serving as a manager under California law.
B. Sheffield Has Never Built a Successful Podcast Audience
Sheffield does not have (and does not claim to have) any experience building an
audience of Patreon subscribers. Such subscribers—along with advertising'—constitute the
Company’s main source of revenue. While Sheffield cites his company, Flux Community
Media and the three podcasts it produces—So This Just Happened, Theory of Change, and
Doomscroll—as demonstrating his experience with podcasts, there is no evidence that he
10 has ever built a significant audience of Patreon or other subscribers for a podcast business.
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For example, the Patreon account for Flux Community Media (the account covering all three
ZN 12
ue of his podcasts) shows a total of only 37 paid subscribers (averaging 12.3 subscribers per
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are
podcast) from its launch in February 2021 until 2022 (at which point the Patreon data ceased
O-— 14
15 being publicly viewable). Similarly, the most popular video on Sheffield’s associated YouTube
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LL 16 channel has only 741 views, and Sheffield’s three podcasts have fewer than 3,000 combined
17 Twitter followers, fewer than 85 combined Patreon posts, and only a handful ratings on
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popular podcast rating sites. Smith Decl. {| 4-7.
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D’Entremont, on the other hand, has a proven track record of building successful
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audiences. The podcast she founded and cohosted—Two Girls One Mic—became a top 20
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comedy podcast and had thousands of downloads per episode. d’Entremont Decl. ff] 5, 8.
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23 d’Entremont also runs a YouTube channel with over 5,000 subscribers and a popular Patreon
24 account with over 1,735 Patrons (putting it among the top 30 accounts of written content
25 creators on Patreon) and almost 600 posts. d’Entremont Decl. I] 2-4. Given how crucial re-
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1 Moreover, Sheffield does not have—or claim to have—any experience developing or
28 managing podcast advertisers.
Page 3 of 6
Thomas Smith, et al. vs. Phillip Andrew Torrez, et al., Sonoma County Case No. SCV-272627
REPLY TO PHILLIP ANDREW TORREZ’S NOMINATION OF MATTHEW SHEFFIELD TO SERVE AS A
RECEIVER OF OPENING ARGUMENTS MEDIA LLC
growing the OA Podcast’s audience is—and the role Patreon and social media plays in
developing that audience—d’Entremont’s track record makes her far better equipped to make
sound business decisions for a company in need of rebuilding.
C. The Appointment of Sheffield Would Create An Impression of Bias
As Sheffield notes in his Declaration, not only does he know Dye, and not only did he
ask Dye to appear as a guest on one of his podcasts and pay her to write an article for one
of his publications, but it was Dye who asked Sheffield to serve as receiver. Sheffield
Decl. { 10. Torrez made Dye the current cohost of the OA Podcast over Smith’s objection,
10 and both have every incentive to seek the appointment of a receiver who will allow Dye to
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remain in her role and continue receiving a salary from the Company.” One of the primary
ZN 12
ue reasons why Plaintiffs believe a receiver is warranted is because the podcast has not been
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able to rebuild any of the audience lost due to Torrez’s misconduct since he impermissibly
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15 seized control of it in February 2023. The appointment of a receiver who knows and has
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LL 16 previously promoted (and paid) a participant in that seizure creates a clear impression of
17 bias. This bias would prevent Sheffield from being able to impartially decide the crucial issue
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of whether or to what extent Dye should continue her involvement with the OA Podcast.
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d’Entremont, on the other hand, has never worked for—or been paid by—Smith,
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Torrez, or Dye. Smith Decl. J 11. As she noted in her declaration, despite her familiarity with
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2 As noted in Plaintiffs’ moving papers, Dye has already cost the Company significant
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amounts of money. While the Company's operating expenses were minimal—less than
25 $5,000 per year—prior to Torrez’s usurpation, since seizing control Torrez has dramatically
increased those expenses to now total around $80,000 per year; presumably a key driver in
26 this increase in costs is the salary Torrez unilaterally chose to pay Dye. Smith Reply Decl.
M1 20-21. A neutral receiver—not one with a potential bias in favor of Dye—is necessary to
27 evaluate whether it is in the Company's best interest to retain Dye in either her current
position or at her current salary.
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Page 4 of 6
Thomas Smith, et al. vs. Phillip Andrew Torrez, et al., Sonoma County Case No. SCV-272627
REPLY TO PHILLIP ANDREW TORREZ’S NOMINATION OF MATTHEW SHEFFIELD TO SERVE AS A
RECEIVER OF OPENING ARGUMENTS MEDIA LLC
the OA Podcast and its hosts (and one appearance as a guest on the podcast at Torrez’s
invitation), she has no personal loyalties that would prevent her from being an impartial referee
in resolving disputes between the parties or making unbiased business decisions. d’Entremont
Decl. ¥ 15.°
D. Sheffield’s Conservative Political Background Could Undermine
Support From the OA Podcast Audience
Finally, Sheffield is a poor choice for receiver because his background in conservative
politics and advocacy is anathema to the progressive values the OA Podcast has espoused
since its inception. Smith Decl. | 12. As Sheffield states in his declaration, he founded the
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11 Washington Examiner and NewsBusters. Sheffield Decl. {| 3. The Washington Examiner is an
12 overtly conservative publication, branding itself as offering “political news and conservative
ZN
ue
Fol 13 analysis."* NewsBusters, another overtly conservative publication, brands itself as “exposing and
are
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combating liberal media bias,” and tells visitors to its website that they will “learn how we
—— [NewsBusters] are destroying the left before they destroy this nation.”> The values espoused by
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these publications—which Sheffield founded—clearly do not align with those held by the OA
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Podcast audience, particularly those who stopped listening to the podcast because they found
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19 Torrez’s conduct inconsistent with such values (and whom the Company should be trying to woo
20 back). Given that the receiver needs to understand the values of the podcast’s audience (and,
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23 3 Despite the finding in the Tentative Ruling that the evidence does “not support” any claim that
d’Entremont was biased—a finding that the Court expressly reaffirmed following oral argument—
24 Torrez attempts once again in his brief nominating Sheffield to argue that d’Entremont is
somehow biased. Given that the Court has already considered and resolved this issue, Plaintiffs
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will not waste the Court's time further responding to Torrez’s baseless claim. For the reasons
26 cited in Plaintiffs’ Motion and herein, d’Entremont would be an impartial and unbiased receiver.
27 4 See https:/www.washingtonexaminer.com/.
28 5 See https:/www.newsbusters.org/.
Page 5 of 6
Thomas Smith, et al. vs. Phillip Andrew Torrez, et al., Sonoma County Case No. SCV-272627
REPLY TO PHILLIP ANDREW TORREZ’S NOMINATION OF MATTHEW SHEFFIELD TO SERVE AS A
RECEIVER OF OPENING ARGUMENTS MEDIA LLC
hopefully, help to bring some progressive listeners back into the fold), the appointment of
Sheffield would not be in the Company’s best interest. Sheffield’s appointment—the news of
which would be followed closely by many alienated OA Podcast listeners°—would be a slap in
the face to those listeners; indeed, not only would Sheffield’s appointment be unlikely to cause
any former listener to resubscribe, but it may well cause some of the remaining audience to
cancel their subscriptions.
d'Entremont, on the other hand, has experience in the progressive and feminist podcast
world, including co-hosting a feminist comedy podcast. d’Entremont Decl. | 5. As d’Entremont
10 noted in her declaration, she is well positioned to understand the audience for the OA Podcast
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and make sound business decisions when needed, in part because there is considerable overlap
ZN 12
ue between the OA Podcast audience and the audience of her new media ventures. /d. J] 13-14.
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Because d’Entremont’s experience is considerably more aligned with the values of much of the
O-— 14
15 OA Podcast audience, d’Entremont would clearly be a more appropriate choice for receiver.
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LL 16 Ml. CONCLUSION
17 For the reasons stated herein, and those laid out in Plaintiffs Motion to Appoint Receiver,
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Plaintiffs respectfully ask that the Court appoint Yvette d’Entremont to serve as the receiver for
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the Company.
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Dated: December 29, 2023 EPSTEIN HOLTZAPPLE CHRISTO LLP
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oy?
By: A A
22 Robert C. Holtzapple
23 COUNSEL FOR PLAINTIFFS
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25 ® Many current and former listeners of the OA Podcast engage in active online discussions about the state
of the podcast, including the instant litigation. For example, there are over 950 comments on five Reddit
26 posts discussing this lawsuit, nearly all of which were likely posted by current and former podcast listeners.
Smith Reply Decl. {J 13. These listeners will surely be paying attention when the Court appoints a receiver
27 and, were Sheffield to be appointed, it would not take long for the OA Podcast’s audience to learn about,
discuss and publicize Sheffield’s background founding conservative publications.
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Page 6 of 6
Thomas Smith, et al. vs. Phillip Andrew Torrez, et al., Sonoma County Case No. SCV-272627
REPLY TO PHILLIP ANDREW TORREZ’S NOMINATION OF MATTHEW SHEFFIELD TO SERVE AS A
RECEIVER OF OPENING ARGUMENTS MEDIA LLC