Dues-paying “members” of the Berkshire Museum in Massachusetts, who have no voting rights in the nonprofit museum corporation, lack standing to seek an injunction to stop the sale of valuable artwork, the state Appeals Court has affirmed.

A group of plaintiffs sued the museum and its trustees individually claiming standing to sue to enforce the museum’s governing documents, to protect their rights as members, and derivatively as corporate members.  A trial judge dismissed their claims and the Appeals Court has affirmed.

The governing documents do not give the plaintiffs standing the Appeals Court said.  “Absent a plaintiff with interests ‘distinct from those of the general public,’ the Attorney General possesses ‘exclusive’ standing in cases involving ‘the efficient and lawful operation of charitable corporations.’  The plaintiffs have failed to show how the harm to them by the sale of the subject paintings is distinct from that of the general public.  We reject the plaintiffs' suggestion that the representation in the museum’s Web site that membership includes ‘opportunities to provide feedback’ provides them with a distinct interest or injury.  Their opportunity to give feedback does not provide them a right to participate in management decisions.”

The Court also said they did not have rights of corporate members.  Membership normally involves voting rights, which were not included the museum’s bylaws.  “The museum’s bylaws exclusively vest corporate membership rights in the trustees and differentiate between corporate membership, which the trustees have, and mere dues-paying membership, which the plaintiffs have,” the Court wrote.

Even if they were voting members, the Court said, they would not have the standing to sue derivatively, citing a number of state cases.  Because they lacked standing to sue, they could not obtain a preliminary injunction.  (Hatt v. McGraw, App. Ct. MA, No. 17-P-1556, 10/1/18.)

YOU NEED TO KNOW

Dues-paying members are often frustrated by the sale of artwork from a museum, but they normally have no legal standing to seek to stop it.  This decision is consistent with others throughout the country.

Not a current Nonprofit Issues subscriber? Start an introductory subscription for just $17.95.