The Volunteer Protection Act does not protect volunteer directors from personal liability for contempt of court when they violate a court injunction, the Ninth Circuit Court of Appeals has ruled. The law was intended to protect volunteers against claims for ordinary negligence and not to interfere with the inherent powers of courts to enforce their orders. (Institute of Cetacean Research v. Sea Shepherd Conservation Society, 9th Cir., No. 12-35266, 12/19/14.)
The Court had issued an injunction on December 17, 2012 against Sea Shepherd Conservation Society, its founder Paul Watson, and “any party acting in concert with them,” enjoining them from attacking whaling ships of the Institute of Cetacean Research and other organizations or going within 500 yards of such ships while operating in open water. Watson received a copy of the order the next day and set to work to implement a “separation strategy” through which the U.S. organization would cede control of its Operation Zero Tolerance campaign and a great deal of equipment to affiliated organizations from other countries. The volunteer board discussed the strategy and approved.
The Australian affiliate took over control of the operations and Watson resigned from its board. The U.S. organization paid $163,000 in Australian expenses after the injunction, and gave several vessels and their equipment worth millions of dollars to other affiliates. Watson resigned from the U.S. organization, but stayed on one of the vessels to be involved in the operation. The affiliated ships violated the injunction, in many cases by coming within 500 yards of the Japanese ships. Watson was on one of the ships that collided with a Japanese ship. The Japanese sued, seeking sanctions for contempt of court.
The Court agreed that Sea Shepherd U.S. had aided and abetted others in performing acts that would have violated the injunction if committed by the U.S. organization and found the organization in contempt. It said that Sea Shepherd U.S. had ceded control to others it believed were beyond the injunction’s reach, “knowing these entities were virtually certain to violate the injunction.” It also provided financial and other assistance to these organizations.
The Court also found the volunteer board members liable for their ratification of the strategy and the transfer of property, without consideration, to those who undertook the mission. “The law is clear,” it said, “that those who control an organization may be held liable if they fail to take appropriate action to ensure compliance with an injunction.”
The volunteer directors argued that they could not be held personally liable because of the Volunteer Protection Act, which generally provides that no volunteer for a nonprofit organization shall be personally liable if acting with the scope of the volunteer’s responsibility and the harm was not caused by willful or criminal misconduct, gross negligence, reckless misconduct, or a conscious, flagrant indifference to the rights or safety of the individual harmed. (See Ready Reference Page: “Federal Law Protects Nonprofit Volunteers”)
The parties argued a variety of reasons why the defendants’ conduct was or was not within the definition of the Act and whether the Act applied to federal laws or only state laws. The Court said it did not have to address the specific arguments because the VPA “does not affect our power to hold those bound by our injunction in contempt.”
“We find it highly improbable that when Congress passed the VPA, it intended to prohibit federal courts from finding volunteer board members liable for their acts of contempt,” the Court wrote. “The text of the VPA does not specifically mention courts’ equity jurisdiction or their contempt powers. Nor does the VPA’s legislative history provide support for the conclusion that Congress’s purposes included curbing the judicial power to enforce orders through contempt. The Committee on the Judiciary’s report observed that ‘H.R. 911, as amended, immunizes a volunteer from liability for harm caused by ordinary negligence.’ [emphasis added.] The committee report also speaks of the ‘litigation craze’ and ‘our “sue happy” culture.’ It explains that the VPA is ‘intended to remove a significant barrier — the fear of unreasonable legal liability — to inducing individuals to volunteer their time to charitable endeavors.’ [emphasis added.] These references indicate that the VPA’s purpose was to curb lawsuits against volunteers, not to curb courts’ contempt power.”
The Court went on to say that “the importance of the power of the courts to punish for contempt makes it highly unlikely that Congress would curtail that power without explicitly indicating its intention” and that the Court would not assume that Congress intended to limit its inherent powers.
The plaintiffs had asked for legal fess and $2 million in damages. The Court granted the claim for legal fees and referred the case to the Appellate Commissioner to determine the fees and the amount of compensatory damages that should be awarded.
YOU NEED TO KNOW
There are lots of reasons why the conduct of the volunteer directors in this case could be found to be outside the area of protection under the Act, but this Court has taken an appropriate step to decide that the Act was never intended to protect volunteers who participate in the violation of court orders. The VPA was clearly intended to reduce suits against volunteer coaches in youth sports leagues and a rash of other cases making it difficult to attract volunteers for charitable activities. It is hard to believe that anyone thought at the time it would be used as the defendants in this case argued it should be.