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Deputy AG May Testify as Expert In Criminal Trial of Nonprofit Exec

Court says testimony helped jury understand the concept of fiduciary duty and contextualize facts
A state’s chief deputy Attorney General supervising the work of charities was properly allowed to testify as an expert witness in a criminal prosecution of a charity CEO accused of fraudulent misuse of organizational funds, the Third Circuit Court of Appeals has held. It has affirmed the federal District Court’s opinion that the Attorney General’s testimony was limited to background topics, was relevant, and not unfairly prejudicial. After a 19-day trial, Renee Tartaglione was convicted of 53 fraud-related counts for her role in defrauding a community health clinic in Philadelphia and for underreporting her resulting income. ( See Nonprofit Issues ® , Vol. XXVIII, No. 2 ) Chief Deputy...

Unsuccessful College Applicants Lack Standing to Sue in Admissions Scandal

Court finds that plaintiff students failed to show a particularized injury from alleged Key Worldwide payoffs
Two students who claimed that they lost out on college admission because of Rick Singer’s alleged payoffs to get students into colleges and universities as qualified student athletes have seen their cases thrown out by a federal District Court in California. The Court said that they had not claimed a particularized individual injury and lacked standing to sue. Two students sued a large number of defendants claiming they were denied admission because Singer engineered a scheme to get others admitted in return for a variety of payoffs. The investigation has led to several convictions so far. The students argued specifically that they were damaged because they paid application fees without...

Member of Nonprofit Can’t Sue To Protest Suspension of Membership Rights

Minnesota Court says Nonprofit Corporation Act requires 10% of members to join in claim to make it valid
A member of a nonprofit corporation in Minnesota may not sue individually to complain about the suspension of her membership rights, an appellate court in Minnesota has ruled. The Court has said that the state’s Nonprofit Corporation Act requires a minimum of 50 members or 10% of the members, whichever is less, to bring a suit seeking equitable remedies. The case arose when the Champagne D’Argent Rabbit Federation, a nonprofit membership corporation promoting the breeding of Champagne D’Argent rabbits, suspended Ruth Crosby’s membership rights. Its executive committee had concluded that Crosby and her parents had been responsible for an unusually large number of membership applications...

Women Under-Represented on Boards Of Large Educational and Medical Institutions

New national study reports special barriers at nonprofits, and recommends measures for promoting change
While national attention has been paid to the urgency of getting more women on for-profit boards to improve corporate governance, little notice has been paid to many of the largest nonprofits in the country – namely universities and hospitals – many of whose boards have failed to diversify. A ground-breaking new national study published by Nonprofit Issues ® reveals some of the hurdles women face getting onto the boards of nonprofit educational and healthcare institutions (“eds” and “meds”) as well as the barriers they face to serving effectively on them. “The need to bridge the gender diversity gap at eds and meds is particularly important at a time when the constituents of these...

Museum Is “Qualified Beneficiary” of Trust And Has Standing to Sue Trustees for Breach

Maine Court allows Museum to appeal order in which Trustees settled case with Attorney General
An antique car museum in Maine that is a permissible beneficiary of a separate trust created by the museum’s founder to support antique car museums has standing to sue the trustees of the trust and reopen the litigation, even after the trustees have settled the claims with the state Attorney General. The Supreme Judicial Court of Maine has reversed a trial court decision dismissing the claims. Richard C. Paine Jr. established the Seal Cove Auto Museum in 1963, and subsequently executed the Paine Automobile Collection Charitable Trust in 1986, to maintain and display his large collection of antique automobiles. Following his death in 2007, the Trust acquired most of his automobiles and an...

Is ‘Conversion Foundation’ Liable For Overpayments to Hospital From Medicare?

Louisiana Court says Foundation did not assume obligation and was not a “successor” subject to liability
More than ten years after Ruston Louisiana Hospital Company, LLC purchased substantially all of the assets of Lincoln General Hospital from the Lincoln Health System and began operating the hospital on a for-profit basis, the Center for Medicare & Medicaid Services gave Ruston notice that it was being asked to repay more than $700,000 in overpayments of Medicare made to Lincoln before the sale. Looking for protection from the indemnification clause in the agreement of sale, Ruston sued the Lincoln Health Foundation, which had been a supporting organization to the System and which had received a portion of the System’s assets when it dissolved shortly after the sale. A federal District...

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